What Is Student Loan Deferment?

College students on campus

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A student loan deferment is an arrangement allowing you to postpone or reduce loan payments temporarily without damaging your credit scores.

Key Takeaways

  • Student loan deferments are an option to suspend loan payments without jeopardizing your credit rating.
  • Deferments may be granted if you meet specific criteria.
  • Interest may still accumulate during the deferral period.
  • Private lenders typically offer less relief than federal lenders can.

What Is Student Loan Deferment?

Any student loan payments you skip during deferment must be made up later, which means a longer repayment period than originally planned. You will not be in default on your loan, but it's essential to understand what happens with your interest rate before deciding on a payment amount. You may still be responsible for interest payments each month—even if you're not required to pay them right away.

If you have subsidized loans, the federal government pays your interest costs for you, which prevents your loan from growing during deferment.


On Tuesday, Nov. 22, 2022, the Biden administration extended the pause on payments and interest on federal student loans for the eighth time. Borrowers with federal student loans won’t have to make payments, and loans won’t resume accumulating interest, until 60 days after court cases challenging Biden’s student loan forgiveness program are resolved or the Department of Education is allowed to move forward with the program. If the cases aren’t resolved by June 30, 2023, payments will resume two months after that.

With unsubsidized debt, you’re responsible for interest costs. You can pay interest costs each month if you choose, and that approach minimizes your total lifetime cost of borrowing. Alternatively, you have the option of adding those interest costs to your loan balance, or “capitalizing” the interest. In that case, your loan balance grows each month.

How Student Loan Deferment Works

Deferments are typically not automatic. Lenders require that you qualify for deferment and submit an application before you stop making payments. In most cases, you submit your request with a form that documents your reason for deferment and provides details about your loan.

Some private lenders also allow deferment. So, it’s crucial to contact your lender as soon as you think deferment might make sense for you.

Federal student loans have clear rules on eligibility. Federal loans that offer deferment include:

  • Perkins Loans
  • Direct Subsidized and Unsubsidized Loans
  • PLUS Loans
  • FFEL Loans, including FFEL PLUS
  • Direct and FFEL Consolidation Loans

In limited cases, such as when you enroll at least half-time in an eligible institution, deferment on federal student loans can happen automatically.


On Wednesday, Aug. 24, 2022, President Joe Biden announced via Twitter the cancellation of $10,000 of federal student loan debt for eligible borrowers and $20,000 for federal Pell Grant recipients.

Eligibility for Deferment

To qualify for deferment on federal student loans, you need to meet specific criteria. Some common examples of satisfying the requirements include:

  • Being enrolled in school at least half-time in an eligible institution
  • Being unemployed or experiencing economic hardship (maximum of three years)
  • Active duty service in the military, including the 13-month period following service
  • Participation in approved rehabilitation training programs
  • Participation in an approved graduate fellowship program

Again, check with your loan servicer if you’re facing financial challenges. You might qualify for other forms of assistance. Private student loans may allow some relief, but these programs are much less forgiving than federal loans.


Don't stop making payments until you get the word from your lender that it approves your request and it's OK to stop. Missing payments without this approval can lead to penalties and fees.

Student Loan Deferment vs. Forbearance

Student Loan Deferment
  • Short-term loan relief

  • Interest accrues on some loans

  • Application required

  • Up to 12 months

  • Interest accrues on all loans

  • Lower threshold for approval

Like deferment, forbearance allows you to suspend or reduce payments for up to 12 months. The CARES Act and executive orders put in place in the spring of 2020 provided student loan relief for all federally-owned student loans, waiving both monthly payments and interest payments, as a form of automatic forbearance through Sept. 30, 2021.

Forbearance is easier to qualify for, especially during financial hardship. Your request may be approved based on your monthly payments taking up a significant amount of your income. Unfortunately, interest will continue to be charged on all loans, including subsidized loans, during forbearance.

Alternatives to Student Loan Deferment

If you’re having a hard time making payments, speak with your lender about your options. Deferment is just one of several options, and it might not be the best choice. Other possibilities include:

Income-Driven Repayment Plans

Income-driven repayment plans can also provide some breathing room. Instead of living with the same monthly payment, you can consider stretching out your payments over an extended period and lowering your payments based on your income. If you take that route, remember you might pay more in interest over the life of your loan. However, after 20 to 25 years, your loan balance might be forgiven—it is 10 years if you work in public service.

You would typically owe taxes on any forgiven balance, but student loan debt forgiven between 2021 and 2025 is tax-free, due to the American Rescue Plan of 2021. If you're not sure how forgiveness might affect your taxes, create a strategy with a CPA and financial planner.

Loan Consolidation

Consolidating debts might also result in lower payments, especially if you opt for a longer repayment period. Again, this can result in higher lifetime interest costs.

A Change in Your Payment Due Date

Sometimes, changing the due date of your payment can make things easier. Time the new payment so that you get paid shortly before your payment is due.

Credit Counseling

A certified consumer credit counselor might help you gain control of your debt. If your loans are federal student loans, your odds of getting relief are much better.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Department of Education. “Biden-Harris Administration Continues Fight for Student Debt Relief for Millions of Borrowers, Extends Student Loan Repayment Pause." 

  2. Federal Student Aid. "Student Loan Deferment." Accessed May 10, 2021.

  3. Twitter. “@POTUS, Aug. 24, 2022 at 11:32 a.m.

  4. U.S. Department of Education. "Coronavirus and Forbearance Info for Students, Borrowers, and Parents." Accessed May 10, 2021.

  5. Federal Student Aid. "Student Loan Forbearance." Accessed May 10, 2021.

  6. Federal Student Aid. "Repayment Plans." Accessed May 10, 2021.

  7. Federal Student Aid. "Public Service Loan Forgiveness (PSLF)." Accessed May 10, 2021.

  8. Congress.gov. "H.R. 1319," Pages 182-183. Accessed May 10, 2021.

  9. Federal Student Aid. "Student Loan Consolidation." Accessed May 10, 2021.

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