Student Loan Deferment
What Is Student Loan Deferment?
Student loan deferment is a temporary postponement of federal student loan payments granted under specific qualifying conditions. During deferment, borrowers are not required to make monthly payments for a set period.
For certain loans, such as subsidized federal student loans, interest may not accrue during the deferment period.
Why It Matters
Deferment provides borrowers with relief during periods when repayment may be difficult, such as returning to school, experiencing unemployment, or facing economic hardship.
Because interest may be paused on some loans, deferment can help borrowers avoid increasing their loan balance.
How Student Loan Deferment Works
Borrowers must apply for deferment through their loan servicer and demonstrate eligibility.
Common deferment situations include:
- enrollment in school at least half-time
- unemployment
- economic hardship
- military service
The length of deferment depends on the type of eligibility and the borrower’s situation.
Example
After graduating from college, Jason enrolls in graduate school. Because he is attending school at least half-time, his federal student loans qualify for deferment and his payments are temporarily postponed.
Student Loan Deferment vs Forbearance
- Deferment may prevent interest from accruing on subsidized loans.
- Forbearance generally allows interest to accumulate on all loan types.
FAQs About Student Loan Deferment
Do borrowers need to apply for deferment?
Yes, most deferments require a formal application.
Does interest stop during deferment?
Interest may stop for subsidized loans but usually continues for unsubsidized loans.
How long can deferment last?
The duration varies depending on the qualifying condition.
Related Terms
