Student Loan Deferment: When Hitting Pause Can Help You Bounce Back

Life has a way of throwing curveballs, and sometimes you need breathing room when it comes to paying off your student loans. Student loan deferment offers a chance to pause your monthly payments while you get back on your feet, whether you’ve lost a job, gone back to school, or are facing financial hardship for any number of reasons.

The key is knowing how and when to defer your loans. Federal student loan deferment is different from private loan deferment, but both can provide relief if you qualify. Below, we’ll walk you through what deferment is, how it works, and whether it’s the right choice for your financial situation.

Table of Contents

1. What is student loan deferment?
2. Does interest accrue during deferment?
3. How long can you defer student loans?
4. How to defer student loans
   1. Federal student loan deferment
   2. Private student loan deferment
5. How many times can you defer student loans?
6. Should you defer student loans?
7. Other options

What is student loan deferment?

Student loan deferment allows you to stop making payments to your student loans. It’s one of several options for managing student loans when you can’t make regular payments. 

If you’re granted a deferment period, your obligation to make payments is suspended for a set time. Once the deferment period ends, you’ll resume making payments to your lender or loan servicer as scheduled. 

Student loan deferment isn’t the same as loan forgiveness. When loans are forgiven, you’re released from the obligation to repay your outstanding balance. Deferment doesn’t reduce your loan balance and can increase what you owe if interest charges accrue.

Does interest accrue during deferment?

Whether interest accrues when student loans are in deferment depends on your loan type. Interest generally does not accrue during deferment if you have any of these types of federal Subsidized Loans:

• Direct Subsidized Loans
• Subsidized Federal Stafford Loans
• Perkins Loans
• The subsidized portion of Federal Family Education Loans (FFEL)

In contrast, interest accrues on federal Unsubsidized Loans in deferment. That’s important to know if you have Direct Unsubsidized Loans, Unsubsidized Federal Stafford Loans, or unsubsidized portions of FFEL loans. Interest will also accrue on Direct PLUS Loans and Direct Consolidation Loans. 

---

Tip

How can you tell whether your loan is Subsidized or Unsubsidized? First, log in to your Federal Student Aid account. (You can also review your original loan documents.) Each loan will be labeled—e.g., Direct Subsidized or Direct Unsubsidized. If you see both, you have both loan types, which is common for federal borrowers. If you’re still unsure, call your loan servicer to confirm.

Private student loans will likely accrue interest if your lender grants a deferment period. Making interest payments to your loans while in deferment can keep your balance from inflating. 

How long can you defer student loans?

In most cases, you can defer federal student loans for up to three years. Exactly how long you can pause payments to federal loans depends on the type of deferment. You may qualify for an additional grace period with certain deferment options. 

Private lenders don’t have a standard timeline for deferments. Each lender will have its own policy about deferment length—and whether to allow it at all. 

How to defer student loans

The qualifications for deferring student loans and the steps involved are different for federal and private lenders. You can’t just stop making payments on your loans. You’ll need to apply for deferment and be approved first. Otherwise, you could end up in default, which would cause a major decrease in your credit score.

If you’ve never applied for student loan deferment before, it’s helpful to know what to expect. We’ll walk you through how to defer federal and private student loans. 

Read More

Do deferred student loans affect your credit score?

Federal student loan deferment

Federal student loan borrowers can apply for deferment through their loan servicer. Submit the appropriate form and provide the supporting documentation your loan servicer needs to process your deferment application. 

The Federal Student Aid website includes information about the different deferment options available and links to application forms. It’s important to understand the types of deferments available to choose the right one for your situation. 

Type	Length
In-school	While enrolled at least half-time, plus a grace period after graduation
Parent in-school	While the student is enrolled at least half-time, plus a grace period
Unemployment	Up to 3 years (must reapply every 6 months)
Hardship	Up to 3 years (often reapply every 12 months)
Peace Corps	Up to 3 years (no annual reapplication needed)
Military	During active duty and grace period
Cancer treatment	Throughout treatment and 6 months afterward

In-school

This is the only federal deferment that can happen automatically. It applies while you’re enrolled at least half-time, and there’s typically a six-month grace period after you leave school. If you think you should have this deferment but didn’t get it, contact your school’s financial aid office to confirm enrollment status.

Read More

Do you have to pay student loans while in school?

Parent in-school

Parents with PLUS Loans (Direct or FFEL) can also defer payments while the student is enrolled at least half-time. Unlike the student in-school deferment, this isn’t automatic—parents must apply through their loan servicer. A six-month grace period also applies after the student graduates or drops below half-time.

Unemployment

If you’re unemployed or can’t find full-time work, you can request up to three years of deferment. You typically need to show proof of unemployment benefits or demonstrate active job searching (e.g., being registered with an employment agency). Remember to reapply every six months if you’re still unemployed.

Read More

What to Do About Student Loans If You Lose Your Job

Economic hardship

Borrowers can pause payments for up to three years if they’re receiving certain state or federal assistance (e.g., SNAP, TANF) or their monthly income is below 150% of federal poverty guidelines. You’ll usually need to reapply every 12 months to maintain this deferment.

Read More

Student Loan Economic Hardship Deferment: What It Is, Who Qualifies, and How to Apply

Peace Corps

Serving in the Peace Corps qualifies as a type of hardship deferment. You can defer federal loan payments for up to three years without needing to reapply annually. Once approved, the deferment remains valid for your entire Peace Corps service term.

Military

If you’re on active duty connected to a war, military operation, or national emergency, you can defer student loan payments. This deferment ends if you reenroll in school at least half-time or 13 months after completing active duty (and any applicable grace period).

Cancer treatment

Borrowers undergoing cancer treatment can defer payments for the duration of their treatment plus six additional months afterward. Contact your loan servicer to request this specialized deferment and confirm eligibility requirements.

Read More

How to handle student loans while on maternity leave

Private student loan deferment

Unlike federal loans, private lenders aren’t required to offer deferment. Still, many provide options similar to federal deferments, though eligibility and terms vary. Always check with your lender to confirm requirements, duration, and whether interest accrues during your deferment period.

In-school deferment

How it works: Pause loan payments while you’re enrolled at least half-time. Some lenders also offer a grace period after graduation.

Private lenders that offer in-school deferment:

• Ascent
• College Ave
• Earnest
• Sallie Mae

Military service deferment

Why consider it? If you’re on active duty, deferring payments can free up cash for other essentials. Policies differ by lender regarding documentation and deferment length.

Private lenders that offer military service deferment:

• Ascent
• College Ave
• Earnest
• Sallie Mae

Internships, clerkships, fellowships, or residency

When it helps: If you’re earning little to no pay while training in a specialized field (e.g., medical residency), deferment can lessen the burden until you earn a full salary.

Private lenders offering this option:

• Ascent
• Sallie Mae

Financial hardship deferment

Who qualifies? Each lender defines “hardship” differently, but it usually covers significant drops in income or unexpected expenses.

Private lenders offering this option:

• College Ave

How to defer student loans when going back to school

If you’re returning to school at least half-time, federal loans typically enter in-school deferment automatically once your enrollment is reported. Private loans may require documentation—contact your lender for instructions.

---

Tip

Keep paying until you get confirmation you’re officially in deferment. Defaulting can hurt your credit and lead to collection actions.

How many times can you defer student loans?

• Federal loans: You can request multiple deferments as long as you qualify, but a 36-month cumulative limit applies.
• Private loans: Limits vary; ask your lender about specific caps and other possible relief options if you’re struggling to keep up.

Should you defer student loans?

Deferment can be useful if you need temporary relief—for instance, while you’re in school or facing short-term financial challenges.

• Subsidized Loans: No interest accrues in deferment, so your balance stays put.

• Unsubsidized or private loans: Interest typically accrues, so consider making interest-only payments if possible.

If you expect long-term payment issues, deferment alone may not solve the problem. Talk to your loan servicer or lender about the best path forward.

Other options outside of deferment

Deferment is temporary, so if you can’t qualify or need a more permanent fix, explore the following:

• Forbearance: Similar to deferment, but interest continues to build on all loan types.
• Income-driven repayment: Lowers monthly payments based on your income, with possible forgiveness after a set period.
• Consolidation: Combines multiple federal loans, potentially simplifying payments (though your rate becomes the weighted average of your current rates).
• Refinancing: Could reduce your interest rate but forfeits federal loan protections.
• Skip a payment: Some private lenders—including Earnest—let you skip an occasional payment, adding it to the end of your term.

---

Tip

Always talk to your lender or servicer first. It can advise on which option—deferment or otherwise—best suits your situation. For more insights, check out our deeper guide to student loan repayment.

---

Read More

Best Student Loan Refinancing Companies