Student loan deferment can pause your monthly loan payments, often for a maximum of three years. Even if you qualify for a deferment, you probably shouldn’t use it unless the following are true:
- You have subsidized federal loans or Perkins loans — these don’t accrue interest during deferment.
- You can’t afford to make any payment on your student loans.
- You’ll be able to restart repayment relatively soon.
If you won’t be in good shape financially for a while, opting for an income-driven repayment plan is a better choice.
How to defer student loans
To defer student loans, you must meet specific eligibility criteria and have deferment time available. You can defer federal student loans only for so long — in most cases, the maximum is three years total.
To apply, send your student loan servicer the appropriate application and any necessary documentation, like proof of unemployment benefits.
To apply, send your student loan servicer the appropriate application and any necessary documentation, like proof of unemployment benefits. Your student loan servicer must grant you a deferment if you qualify, but keep making payments until you’re officially approved.
Types of student loan deferment
Here are the most common kinds of federal student loan deferment:
If you qualify, you should automatically receive an in-school deferment. If you don’t, ask your school’s admissions or enrollment office to send your information to your student loan servicer.
Parent PLUS borrowers can receive a similar deferment while the student using the loan is enrolled at least half-time, but they must request it.
Length: This deferment is available as long as you — or the student benefitting from the loan, for parent PLUS borrowers — are enrolled at least half-time. There’s no time limit.
Length: Most borrowers can receive up to 36 months of unemployment deferment, and you must reapply every six months.
Length: Most borrowers can receive up to 36 months of an economic hardship deferment, and you must reapply every 12 months if you’re not in the Peace Corps.
Length: You’re eligible for this deferment as long as you’re on active military duty. You can also use it for 13 months after your service ends or until you return to school at least half-time — whichever happens first.
Borrowers with balances on federal student loans before July 1, 1993, have additional deferments as well — for example, for working mothers.
Many private lenders also let you defer student loans while you’re in school or the military. Contact your lender for eligibility details or to find out how to apply.
Is student loan deferment bad?
Student loan deferment can be bad — or at least expensive — if you have private or unsubsidized federal student loans. You can find out if your loans are unsubsidized by checking your StudentAid.gov account.
These loans accrue interest during deferment, and you’ll be responsible for paying it. If you don’t do this while the loan is in deferment, that unpaid interest will be capitalized, or added to your loan balance, when you enter repayment.
Those extra costs may be worth it if the alternative is having your wages garnished or losing your tax refunds because of a student loan default. Deferment is also a better choice than student loan forbearance — another way to pause repayment — because you always pay interest during forbearance.
Deferment vs. income-driven repayment
Worried about affording your payments in the long run? Enrolling in income-driven repayment can offer the same immediate relief as student loan deferment, as well as additional long-term benefits.
- You’ll likely still pay less each month. Many factors contribute to how income-driven payments are calculated. If you’re deferring loans because you don’t earn much money, your income-driven payments could be as low as $0 — essentially the same amount as pausing payments altogether.
- You can save on interest, too. A big benefit of deferment is not paying interest on subsidized loans. But most income-driven plans also waive those costs if your payments don’t cover accrued interest. This lasts for three years, the same length as unemployment and economic hardship deferments.
- You’ll potentially earn loan forgiveness. After 20 or 25 years of payments, income-driven plans forgive any remaining balance on your loans. So instead of pausing payments for three years with a student loan deferment, you could pay under an income-driven plan and be that much closer to forgiveness.
You may pay more interest overall on income-driven repayment because these plans extend your repayment term. Use Federal Student Aid’s Repayment Estimator to calculate the short- and long-term costs to see if an income-driven repayment plan makes more sense for you than a student loan deferment.