Unemployment Deferments for Student Loans: Key Info and Upcoming Changes

An unemployment student loan deferment allows you to postpone federal student loan payments for up to 36 months. To qualify, unemployed student borrowers must be receiving unemployment benefits or seeking full-time work.

If you've lost your job, an unemployment deferment may be a good choice if you expect to start working again soon. Otherwise, consider enrolling in an income-driven repayment (IDR) plan that ties payments to income and family size.

» MORE: How to get student loan help

Unemployment deferments to end for new loans in 2027

Any borrower who takes out a new federal student loan on or after July 1, 2027 will be blocked from accessing deferments for unemployment or economic hardship. (July 1, 2027 is the first day you can take out a federal student loan for the 2027-28 academic year.)

This change is the result of a provision in President Donald Trump’s “one big, beautiful bill.”

If you’re an existing borrower, you can still access unemployment deferments for loans taken out prior to July 1, 2027.

Applying for an unemployment deferment

To apply for deferment, submit an unemployment deferment application to your student loan servicer. Your application requires one of the following:

• Proof of unemployment benefits. You must provide documentation that shows you’re currently eligible for unemployment, such as a copy of benefits from your state’s Department of Labor. This documentation needs to include your name, address and Social Security number.

• Confirmation that you’re seeking full-time work. You must have made at least six attempts in the last six months to gain full-time employment. You must also be registered with an unemployment agency, unless there isn’t one within 50 miles of your home. Using a temp agency or job search website doesn’t count.

You can also get unemployment deferment if you’re underemployed — working, but less than 30 hours a week in a job that won’t last more than three months in a row. You can’t qualify if you’ve rejected any recent offers of full-time employment — even if you were overqualified for the position.

If you meet the requirements for unemployment deferment, your servicer cannot deny your application.

» MORE: Deferment vs. forbearance: Which is right for you?

Interest could build during unemployment deferment

If you have unsubsidized or parent or grad PLUS loans, interest could build on your student loans during deferment. If you don't pay the interest as it accrues, it will capitalize (be added to the loan principal) after your deferment period ends. This could bump up the total amount you must repay over the life of your loan.

Subsidized and Perkins loans are exempt from interest accruing during a deferment.

How long does unemployment deferment last?

You can receive up to 36 months of unemployment deferment, but you’ll need to reapply — and meet the indicated qualifications — every six months.

Deferment length also varies by loan type. If you have Federal Family Education Loan Program, or FFELP, loans from before July 1, 1993, you may be eligible for additional deferments. Perkins borrowers can receive 36 months, with eligibility reviewed annually.

All unemployment deferments end once you’ve exhausted your eligibility or gotten a job. Once you’re working full-time, you must let your federal student loan servicer know immediately.

Other options for reduced loan payments

If you’ve returned to work or otherwise don’t meet the requirements for an unemployment deferment, other options that reduce payments can keep you out of student loan default. The best choice will depend on your financial situation:

• If you can’t afford your current payments. Income-driven repayment plans set your monthly payments at a percentage of your discretionary income. These plans extend your repayment term to 20 or 25 years, potentially increasing the amount you repay. 

• If you can’t pay anything — even income-driven payments. Economic hardship deferment is available if you’re working full-time and meet one or more of the following qualifications: serving in the Peace Corps; receiving assistance from a program such as the Supplemental Nutrition Assistance Program (SNAP); or earning less than 150% of the poverty guideline for your family size and state of residence.

• If you’re catching up on other financial priorities. Once you’re getting a paycheck again, you may have more pressing bills to pay than student loans. Student loan forbearance lets you pause payments at the discretion of your lender. It’s not a good long-term option since interest accrues on all loans, but forbearance can offer temporary breathing room.

• If you borrow a loan on or after July 1, 2027. Consider signing up for a temporary forbearance, which can last up to nine months in a 24-month period. Interest will accrue in all cases. 

What to do if you have private student loans

Private lenders may let you postpone payments or provide alternative repayment options if you’re unemployed or facing financial hardship.

Interest typically accrues during these breaks, increasing the amount you owe. While a pause in payment may alleviate immediate financial needs, your balance will continue to increase as interest accrues.

Contact your lender for details on its deferment and forbearance policy.

» MORE: Can I get private student loan forgiveness?