When money is tight, pausing student loan payments can provide breathing room. For federal student loans, student loan deferment lets you temporarily stop making payments if you meet certain conditions, and on some loans the government pays the interest while payments are paused. Deferment is not always the best tool, though. This guide explains the types of deferment, how interest works, and how it compares with other options. Federal rules have changed several times in recent years, so confirm current details at StudentAid.gov or with your servicer.
What deferment is
Deferment is a period during which repayment of principal and interest is temporarily postponed. It is available for federal Direct Loans, Federal Family Education Loan (FFEL) Program loans, and Perkins Loans, each with its own rules. Private student loans are not eligible for federal deferment, although private lenders may offer their own hardship options.
What happens to interest
- Direct Subsidized Loans, Subsidized Federal Stafford Loans, and Perkins Loans: The federal government generally pays the interest during deferment.
- Unsubsidized loans, PLUS loans, and the unsubsidized portion of consolidation loans: Interest continues to accrue. Unpaid interest may be capitalized, or added to principal, in certain situations, increasing the amount you owe.
You can make interest-only payments during deferment to prevent interest from growing.
Main types of deferment
In-school deferment
If you are enrolled at least half time at an eligible school, loans are generally deferred automatically. If your loans are not deferred automatically, contact your school’s financial aid office or your servicer. Graduate students with PLUS loans may also qualify.
Graduate fellowship and rehabilitation training deferment
Available for students in approved graduate fellowship programs or rehabilitation training programs for people with disabilities.
Unemployment deferment
Available if you are receiving unemployment benefits or are unable to find full-time employment despite a diligent search. It is generally granted in six-month increments, up to a cumulative maximum of three years.
Economic hardship deferment
Available if you receive means-tested benefits such as SNAP or TANF, serve in the Peace Corps, or work full time with earnings below a threshold tied to the federal poverty guideline or minimum wage. It is also generally limited to three years total.
Military service and post-active duty deferment
Available during qualifying active-duty service during a war, military operation, or national emergency, and for 13 months after active duty for certain borrowers enrolled in school at the time of call-up.
Cancer treatment deferment
Available while you are receiving cancer treatment and for six months after treatment ends. It applies to loans that entered repayment on or after September 28, 2018, or were in repayment on that date.
Other deferments
Additional types may be available for Perkins Loans and older FFEL loans, such as teacher or public service deferments under older rules.
Recent legislative changes
The budget reconciliation law enacted on July 4, 2025 (Public Law 119-21) eliminates economic hardship and unemployment deferments for Direct Loans made on or after July 1, 2027, and limits certain discretionary forbearance on those new loans to 9 months in any 24-month period. Loans made before July 1, 2027 keep access to these deferments under the existing rules. Check StudentAid.gov for how the changes apply to your loans.
Deferment vs. forbearance
| Feature | Deferment | Forbearance |
|---|---|---|
| Eligibility | Specific qualifying situations | Broader, including financial difficulty or medical expenses |
| Interest on subsidized loans | Generally paid by government | Accrues |
| Interest on unsubsidized loans | Accrues | Accrues |
| Time limits | Vary by type, often three years for hardship and unemployment | Generally up to 12 months at a time, with cumulative limits |
If you qualify for deferment, it is usually preferable to forbearance because subsidized loans do not accrue interest.
Effects on forgiveness programs
Most months in deferment or forbearance do not count toward Public Service Loan Forgiveness or income-driven repayment forgiveness, though there are exceptions, and federal rules on credit for certain periods have changed. If you are pursuing forgiveness, check how a pause would affect your progress, and consider whether an income-driven repayment plan with a low or zero-dollar payment would keep you on track instead.
Income-driven repayment as an alternative
Income-driven repayment plans set payments based on income and family size. For borrowers with very low income, the required payment can be $0, and those $0 months can still count toward forgiveness under the plan rules and, for qualifying employment, PSLF. For long-term hardship, an income-driven plan may be better than repeatedly deferring.
How to apply
- Log in to StudentAid.gov to identify your loan types and servicer.
- Choose the deferment form for your situation; most are available on StudentAid.gov or from your servicer.
- Provide documentation, such as proof of unemployment benefits, enrollment, or military orders.
- Keep paying until your servicer confirms the deferment is approved, to avoid delinquency.
- Note the end date and plan for payments to resume.
Private student loans
Private lenders are not required to offer deferment. Many offer in-school deferment and some offer limited hardship forbearance or reduced payment programs. Contact the lender, ask about options in writing, and understand how interest will be handled.
Common mistakes
- Stopping payments before deferment is approved
- Forgetting that interest accrues on unsubsidized loans
- Using deferment when an income-driven plan would count toward forgiveness
- Missing the end date and becoming delinquent
- Assuming private loans have the same options as federal loans
An example of interest during deferment
Suppose you have a $20,000 unsubsidized loan at 6% interest and you receive a 12-month unemployment deferment. Simple interest of about $1,200 accrues over the year. If you pay nothing during deferment, that interest may be capitalized in certain circumstances, and you will then pay interest on the higher balance. If instead you pay roughly $100 a month in interest, your balance stays at $20,000. If the same amount were a subsidized loan, the government would generally pay the interest, and your balance would not grow.
Deferment for parents with PLUS loans
Parent PLUS borrowers may request deferment while the student for whom they borrowed is enrolled at least half time and for six months after the student leaves school or drops below half-time enrollment. Interest accrues on Parent PLUS loans during deferment. Parents may also qualify for other deferments, such as unemployment or economic hardship, based on their own circumstances.
What to do when deferment ends
Your servicer should notify you before payments resume. Review your new payment amount, confirm your contact information and auto-debit settings, and consider whether an income-driven plan fits your budget. Enrolling in automatic payments with your federal servicer may qualify you for a small interest rate reduction. If you cannot afford payments, contact your servicer before you miss one; delinquency reported to credit bureaus and eventual default can lead to wage garnishment, tax refund offsets, and collection costs.
Getting help
Free help is available from your loan servicer, the Federal Student Aid Information Center, and StudentAid.gov. Be wary of companies charging fees to apply for deferment or forbearance, as you can apply yourself at no cost.
Keeping records
Save copies of every deferment request, approval letter, and supporting document. Check your loan details on StudentAid.gov periodically to confirm the deferment is recorded and the dates are correct. If your loan is transferred to a new servicer, verify that your deferment status carried over, since transfer errors can lead to unexpected bills or missed payments that affect your credit history.
Related reading: The Student Aid Index: What It Measures and How It Shapes Your Financial Aid Offer and Federal Work-Study: How the Program Works, What Jobs Pay, and How to Land a Position.
Frequently Asked Questions
What is student loan deferment?
A temporary postponement of federal student loan payments for qualifying situations such as school enrollment, unemployment, or economic hardship.
Does interest accrue during deferment?
On subsidized loans, the government generally pays interest. On unsubsidized and PLUS loans, interest accrues.
How long can I defer my student loans?
It depends on the type. Unemployment and economic hardship deferments are generally limited to three years each.
Is deferment better than forbearance?
Usually, if you qualify, because subsidized loans do not accrue interest during deferment.
Can private student loans be deferred?
Only if the lender offers it. Federal deferment rules do not apply to private loans.
This article is for general informational purposes only and is not legal, medical, tax, or financial advice. Rules vary by state and change over time; confirm details with the relevant agency or a licensed professional.
