How Much Longer Are Student Loans Deferred

Last Updated on May 24, 2022

If you are in college and have recently graduated, you may be wondering if it’s possible to defer your student loans. Students who have a lot of debt can defer their loans for up to three years. This will allow them to get on their feet after graduating from college.

If you are considering deferring your student loans, there are several things that you need to keep in mind before making a decision:

1) The interest will continue to accrue even if you defer your payments

2) Once the deferment period ends, you will have six months before the payments begin again

3) You must pay at least $50 per month while the loan is deferred

How Much Longer Are Student Loans Deferred

With deferment, you won’t have to make a payment. However, you probably won’t be making any progress toward forgiveness or paying back your loan. As an alternative, consider income-driven repayment.

If you’re having trouble repaying your loans due to circumstances that may continue for an extended period, or if you’re unsure when you’ll be able to afford to make your monthly loan payments again, a better option might be to consider changing to an income-driven repayment plan. Income-driven repayment plans base your monthly payments on your income and family size. In some cases, your payment could be as low as $0 per month. Income-driven plans can also provide loan forgiveness if your loan isn’t paid in full after 20 or 25 years.

Always contact your student loan servicer immediately if you’re having trouble making your student loan payments.

If you’re granted a deferment, you might still be responsible for paying the interest that accrues during the deferment period. The table below shows when you are responsible for paying the interest and when you are not responsible based on loan type.

Loan Types Where You Are Generally NOT Responsible for Paying the Interest That Accrues
Loan Types Where You Are Responsible for Paying the Interest That Accrues
Direct Subsidized Loans
Direct Unsubsidized Loans
Subsidized Federal Stafford Loans
Unsubsidized Federal Stafford Loans
Federal Perkins Loans
Direct PLUS Loans
The subsidized portion of Direct Consolidation Loans
The subsidized portion of FFEL Consolidation Loans
The unsubsidized portion of Direct Consolidation Loans
The unsubsidized portion of FFEL Consolidation Loans
When you are responsible for paying the interest on your loans during a deferment, you can either pay the interest as it accrues, or you can allow it to accrue and be capitalized (added to your loan principal balance) at the end of the deferment period. If you don’t pay the interest on your loan and allow it to be capitalized, the total amount you repay over the life of your loan may be higher. Unpaid interest is capitalized only on Direct Loans and FFEL Program loans. Unpaid interest is never capitalized on Perkins Loans.

Request a Deferment
Most deferments are not automatic—you need to submit a request to your student loan servicer, often on a form. Also, for most deferments, you must provide your student loan servicer with documentation to show that you meet the eligibility requirements for the deferment. Learn more about requirements and how to access request forms.

Understand Eligibility for a Deferment
There are a variety of circumstances that may qualify you for a deferment on your federal student loan.

Cancer Treatment Deferment
You may qualify for this deferment while you are undergoing cancer treatment and for the six-month period after your treatment ends.

Complete the Cancer Treatment Deferment Request.

Economic Hardship Deferment
You may qualify for this deferment if you

are receiving a means-tested benefit, like welfare (e.g., Temporary Assistance for Needy Families (TANF));

work full-time but have earnings that are below 150% of the poverty guideline for your family size and state of residence; or

are serving in the Peace Corps.

You can only receive this deferment for up to three years.

Complete the Economic Hardship Deferment Request.

Graduate Fellowship Deferment
You may qualify for this deferment if you are enrolled in an approved graduate fellowship program. A graduate fellowship program is generally a program that provides financial support to graduate students to pursue graduate studies and research. Most graduate fellowship programs are for doctoral students, but some are available to master’s degree students.

Complete the Graduate Fellowship Deferment Request.

In-School Deferment
You are eligible for this deferment if you’re enrolled at least half-time at an eligible college or career school. If you’re a graduate or professional student who received a Direct PLUS Loan, you qualify for an additional six months of deferment after you cease to be enrolled at least half-time.

Important! If you are enrolled in an eligible college or career school at least half-time, in most cases your loan will be placed into a deferment automatically based on enrollment information reported by your school, and your loan servicer will notify you that the deferment has been granted. If you enroll at least half-time but do not automatically receive a deferment, you should contact the school where you are enrolled. Your school will then report information about your enrollment status so that your loan can be placed into deferment.

Complete the In-School Deferment Request.

Note: In-school deferment is generally automatic, so in most cases it isn’t necessary to complete the In-School Deferment Request. However, if you’re enrolled at least half-time but do not automatically receive a deferment, you can either ask your school to report your enrollment information, as explained above, or complete the In-School Deferment Request.

Military Service and Post-Active Duty Student Deferment
You may be eligible for this deferment if

you are on active duty military service in connection with a war, military operation, or national emergency; or

you’ve completed qualifying active duty service and any applicable grace period. This deferment ends when you resume enrollment in an eligible college or career school on at least a half-time basis or 13 months following the completion date of active duty service and any applicable grace period, whichever is earlier.

Complete the Military Service and Post-Active Duty Student Deferment Request.

Parent PLUS Borrower Deferment
You may qualify for this deferment if you’re a parent who received a Direct PLUS Loan to help pay for your child’s education, and the student you took the loan out for is enrolled at least half-time at an eligible college or career school. You can also receive a deferment for an additional six months after the student ceases to be enrolled at least half-time.

Complete the Parent PLUS Borrower Deferment Request.

Note: As an alternative to completing the Parent PLUS Borrower Deferment Request, if the school your child is attending requires you to complete a Direct PLUS Loan Request, you can request this deferment when you submit the Direct PLUS Loan Request. Check with your child’s school.

Rehabilitation Training Deferment
You may qualify for this deferment if you’re enrolled in an approved rehabilitation training program that is designed to provide vocational, drug abuse, mental health, or alcohol abuse rehabilitation treatment.

Complete the Rehabilitation Training Deferment Request.

Unemployment Deferment
You may be eligible for this deferment if you receive unemployment benefits or you are seeking and unable to find full-time employment. You can receive this deferment for up to three years.

Complete the Unemployment Deferment Request.

If you received federal student loans before July 1, 1993, you might be eligible for additional deferments. For more information about these deferments, contact your loan servicer.

Loan Types Eligible for Deferment
All the deferments are available to Direct Loan, FFEL Program loan, and Perkins Loan borrowers.

If you received a Perkins Loan, you may also be eligible for a deferment while you are working toward cancellation on your Perkins Loan. Get contact information regarding your Perkins Loan.

In most cases, Perkins Loan recipients who receive a deferment will receive a six-month post-deferment grace period that begins on the date they no longer meet the deferment eligibility requirements. No payments are required during the post-deferment grace period.

You MUST continue making payments on your student loan(s) until you have been notified that your request for deferment has been granted. If you stop paying and your deferment is not approved, your loan(s) will become delinquent and you may go into default.

forbearance vs deferment student loans

Both allow you to temporarily postpone or reduce your federal student loan payments.
The main difference is if you are in deferment, no interest will accrue to your loan balance. If you are in forbearance, interest WILL accrue on your loan balance.

Forbearance is “a form of repayment relief granted by a lender that temporarily postpones payments due from a borrower, while interest on the loan typically continues to accrue.” Let’s break that down. The lender is the one providing the loan—the bank or institution loaning the money. The borrower is the one receiving the loan—the one responsible for paying it back.

When a borrower is not able to keep up with their regular payments, the lender may offer the option of a forbearance, meaning that the borrower can pause payments for a temporary period of time. But the terms of a forbearance usually require interest to keep accruing on the balance that’s owed. This means that a forbearance can result in an increase in the final amount required to be paid.

Let’s look at a simplified example involving student loans. Say you have $10,000 in student loans, and you’re paying a 1% interest rate per month. At the end of the first month of forbearance, the total loan amount you need to pay back will actually be $10,100, because the interest has continued to build up. And it will be even more with each subsequent month, as the interest rate is applied to the balance (in accordance with the specific terms of the loan).

Learn the basic language of loans with this review on using loan, loaned, lend, and lent.

Or, say that you have a $250,000 mortgage. Let’s keep it simple and set the interest at a monthly rate of 1%. Your lender may allow you to temporarily stop payments on your mortgage, such as after the loss of a job. At the end of the first month of a forbearance, your new balance will be $252,500, due to the accrued interest.

The terms of a forbearance vary for different types of loans and different lenders.

Outside of finance, forbearance has other, more general meanings related to self-control and refraining from doing things.

What is deferment?
In the context of loans, deferment often refers to a pause on payments during which interest does not continue to accrue. In other words, a deferment allows you to temporarily stop making payments on your debt without the interest continuing to pile up. The word deferral is sometimes used in the same way. Taking this option is sometimes called deferring a loan.

In the student loan and mortgage examples above, if you were granted a deferment of your loan payments, you would still owe the same amount ($10,000 or $250,000) whenever you were able to resume payments. Your loan would neither grow nor shrink—it would be temporarily frozen.

Sometimes, lenders use the word deferment in other ways. For example, it’s sometimes used to refer to an option that follows a forbearance, in which the skipped payments are set aside to be paid after the rest of the loan has been paid.

Like forbearance, the word deferment has other, more general meanings outside of finance, but it usually involves the postponement of something.

Our finances depend heavily on another set of terms worth discussing: inflation vs. deflation.

What is the difference between forbearance and deferment?
Forbearance and deferment can both refer to temporary pauses on debt payment, but forbearance usually involves the continued accumulation of interest, while deferment does not. If this is the case, and you have a choice between deferment and forbearance, it obviously makes sense to choose deferment when all other terms are equal.

However, the terms can be used differently by different lenders and for different types of loans. Sometimes, an option may involve both forbearance and deferment. And sometimes, such options come with other catches, such as a change in credit status. It’s always important to know the exact terms before entering into any agreement.

You can see if you qualify for student loan deferment or forbearance at StudentAid.gov.

You can learn more about mortgage forbearance from the Consumer Financial Protection Bureau.

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