Deferment
What Is Deferment?
Deferment is a temporary pause in required loan payments granted under specific qualifying conditions.
For federal student loans, deferment may be available due to enrollment in school, unemployment, economic hardship, or military service.
Interest treatment during deferment depends on loan type.
Why It Matters
Deferment:
- Provides short-term payment relief
- Prevents delinquency during hardship
- May allow interest to continue accruing
Subsidized federal loans may not accrue interest during certain deferment periods, while unsubsidized loans typically do.
Understanding interest impact is important before requesting deferment.
How Deferment Works
Deferment temporarily suspends required monthly payments for an approved period.
Example: A borrower returning to school at least half-time may qualify for in-school deferment.
During deferment, payments are not required, but interest may accrue depending on loan type.
After deferment ends, regular repayment resumes.
Deferment vs. Forbearance
Deferment → Often tied to qualifying conditions with possible interest protections
Forbearance → Broader relief but typically with interest accrual
Eligibility criteria differ.
FAQs About Deferment
Does deferment affect credit?
Approved deferment does not count as missed payments.
Is interest paused during deferment?
Interest treatment depends on whether the loan is subsidized or unsubsidized.
Can deferment be requested multiple times?
Eligibility and duration limits apply under federal rules.
Related Terms
- Forbearance
- Student Loan
- Interest Accrual
- Income-Driven Repayment
- Loan Servicer
- Student Loan Deferment
