How to Pause Student Loan Payments (Deferment vs. Forbearance)

Pausing student loan payments can be the right move—but only if you choose the right pause.

Deferment and forbearance are often lumped together as “payment relief.” In reality, they work differently, cost different amounts over time, and are approved for different reasons. Choosing the wrong option can quietly add thousands of dollars to your balance.

This guide shows you exactly how to pause student loan payments, step by step, and how to choose between deferment and forbearance based on your situation—not guesswork.

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Step 1: Confirm What Type of Student Loans You Have

Before you apply for anything, you need to know who controls your options.

Log into:

• studentaid.gov for federal loans
• Your private lender’s portal for private loans

Write down:

• Loan type (Federal or Private)
• Servicer name
• Current balance
• Interest rate

Why this matters:
Deferment and forbearance rules apply mainly to federal loans. Private lenders may offer hardship options, but they use different terms and approval standards.

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Step 2: Understand the Core Difference (Before Choosing)

At a high level:

Deferment

• Payments pause
• Interest may not accrue on certain federal loans
• Requires qualifying reasons (school enrollment, unemployment, economic hardship)

Forbearance

• Payments pause
• Interest always accrues
• Easier to qualify for
• Intended for short-term relief

Smile Money Tip: Interest behavior—not approval speed—is the real cost driver here.

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Step 3: Check Whether You Qualify for Deferment First

Deferment is usually the better option if you qualify, so check this first.

Common deferment eligibility includes:

• Enrolled in school at least half-time
• Unemployed
• Experiencing economic hardship
• Military service or certain public service roles

Important interest rule:

• Subsidized federal loans → interest does not accrue during deferment
• Unsubsidized loans → interest does accrue

Smile Money Tip: If you have subsidized loans, deferment can pause payments without increasing your balance.

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Step 4: Decide If Forbearance Is the Right Tool

If you don’t qualify for deferment—or need immediate relief—consider forbearance.

Forbearance makes sense when:

• Income disruption is temporary
• You need fast approval
• You plan to resume payments soon

What to expect:

• Interest accrues daily
• Unpaid interest may capitalize (get added to your balance)

Why this matters:
Forbearance is flexible, but it is never free. You’re buying time with future interest.

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Step 5: Apply Through Your Loan Servicer

Once you choose the option, apply directly with your servicer.

For federal loans:

• Log into studentaid.gov or your servicer’s site
• Select deferment or forbearance
• Submit required documentation

For private loans:

• Contact your lender directly
• Ask about hardship or payment relief programs
• Get confirmation in writing

Do not stop payments until approval is confirmed.

Smile Money Tip: Missing payments while waiting for approval can still trigger delinquency.

👉 Learn: How to Contact Student Loan Servicers →

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Step 6: Decide Whether to Pay Interest During the Pause

If interest will accrue, you have a choice.

Options:

• Pay interest monthly
• Make occasional interest-only payments
• Let interest accrue and capitalize

Smile Money Tip: Paying interest—even $50–$100 a month—can prevent balance growth and future payment shock.

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Step 7: Set an End Date and a Restart Plan

Payment pauses should be temporary by design.

Before your pause begins, decide:

• How long you expect to need relief
• What will change before payments resume
• Which plan you’ll move into next

Set a calendar reminder 30–60 days before the pause ends.

Smile Money Tip: Forbearance without a restart plan often leads to repeated pauses and compounding interest.

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Worked Example: Deferment vs. Forbearance in Real Life

Scenario

• Loan balance: $30,000
• Interest rate: 6%
• Monthly interest: ~$150

Option A: Deferment (Subsidized Loans)

• Payments paused
• Interest does not accrue
• Balance remains $30,000

Option B: Forbearance (6 months)

• Payments paused
• Interest accrues ~$900
• New balance after capitalization: $30,900

This difference affects:

• Future monthly payments
• Total repayment time
• Long-term cost

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Step 8: Know When Pausing Is the Wrong Move

Pausing payments may not be ideal if:

• You’re pursuing loan forgiveness
• You qualify for income-driven repayment
• You can afford reduced payments instead

In those cases, switching plans may protect progress better than stopping payments.

👉 Related: How to Choose a Student Loan Repayment Plan (Step-by-Step)

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Final Check: Is This a Pause or a Plan?

Pausing student loan payments can be responsible when it’s intentional and temporary.

Ask yourself:

• Does this solve a real short-term issue?
• Do I understand the interest impact?
• Do I know what happens next?

If yes, proceed confidently.
If not, explore alternatives.

Next Steps:

👉 If payments feel too high: How to Lower Your Student Loan Payment →
👉 If balance growth worries you: Student Loan Interest Explained
👉 If relief is temporary: How to Pay Off Student Loans Faster (Without Destroying Cash Flow)

👉 Need to find a product: Student Loans in the Marketplace →