Both deferment and forbearance allow you to pause student loan payments during financial difficulties. The key difference is interest: during forbearance, interest keeps adding up. But with deferment, some federal loans, like subsidized loans don’t charge interest during the break.
Here’s how to choose:
- Deferment is often better if you have subsidized or Perkins loans and you’re unemployed or facing serious financial hardship.
- Forbearance may be the better option if you don’t qualify for deferment and your money troubles are short-term.
Both can help you avoid falling behind on payments, but they’re not permanent fixes. If your finances won’t improve soon, consider switching to an income-driven repayment plan instead of pausing payments.
Key Differences Between Student Loan Deferment vs Forbearance
Here’s how federal student loan deferment and forbearance differ in a some key areas.
| Feature | Deferment | Forbearance |
|---|---|---|
| Purpose | Temporarily pause payments for eligible financial or life situations | Temporarily reduce or pause payments, usually for short-term financial strain |
| Interest Accrual | No interest on subsidized federal loans or Perkins Loans during the pause | Interest builds up on all loan types during the pause |
| Eligibility Requirements | Must meet specific conditions (e.g., unemployment, school enrollment, etc.) | Usually based on a request; not tied to specific events |
| Approval Process | Requires a deferment-specific form with supporting documents | Simpler process; may be granted by servicer over the phone or with one form |
| Duration | Varies based on type (some last years if you qualify) | Typically approved for up to 12 months at a time |
| Loan Types Covered | Only available for federal student loans | Available for both federal and some private student loans |
| Who Decides | Servicer must approve if you meet criteria and haven’t used up deferment time | Approval is often at the servicer’s discretion unless it’s mandatory |
| Impact on Credit | No negative impact on your credit score | No negative impact on your credit score |
| Best For | Borrowers with subsidized loans facing long-term hardship | Borrowers with temporary cash flow issues who don’t qualify for deferment |
Private Student Loans: Forbearance and Deferment Work Differently
When it comes to private student loans, deferment and forbearance don’t offer the same advantages as they do with federal loans. In most cases, interest continues to build on all private loans during any type of payment pause. That means even if your monthly payments are temporarily on hold, your total balance will grow.
Unlike federal loans, private lenders aren’t required to offer deferment or forbearance. Each lender sets its own rules, and eligibility often depends on factors like being enrolled in school, active military service, or experiencing financial hardship. Some lenders may allow interest-only payments during school or hardship periods, but full pauses are rare and short-term.
If you’re struggling with private student loan payments, it’s important to contact your lender directly. Ask about any available hardship options, such as reduced interest, partial payments, or short-term payment relief.
Estimate the Cost of Pausing Payments
Use this calculator to see how deferment or forbearance affects your overall loan balance.
Student Loan Payment Pause Calculator
Compare the costs of deferment versus forbearance on your student loans. See how pausing payments affects your loan balance over time.
Daily Interest Accrual
$0.00
Amount added to your loan each day during pause
Total Added Interest
$0.00
Will be capitalized (added to principal)
New Loan Balance
$0.00
Your balance after the pause period
Note: Subsidized federal loans don’t accrue interest during deferment. Interest continues to accumulate on unsubsidized loans and during forbearance periods, and it may be added to your main loan balance (capitalized).
How to Request Student Loan Forbearance
If you need temporary relief from your monthly student loan payments and don’t qualify for deferment, you may be able to request forbearance. Here’s how to get started:
- Identify Your Forbearance Type:
There are two types which are general forbearance (optional and based on your servicer’s decision) and mandatory forbearance (required if you meet specific conditions like military service, AmeriCorps, or a medical internship). - Gather the Right Documents:
Depending on the type, you may need to provide financial records, proof of service, or employment documents. - Download the Correct Form:
Visit your loan servicer’s website or studentaid.gov to access the forbearance request form. Fill it out completely and include all necessary documentation. - Submit and Continue Payments:
Send the completed form to your loan servicer. Continue making payments until you receive official confirmation that your forbearance has been approved.
Forbearance is typically approved in 12-month periods, and certain loans have a cap on the total time you can pause payments. Consider this option carefully if your financial circumstances are likely to get better soon.
How to Apply for a Student Loan Deferment
If you’re experiencing specific qualifying life events, like unemployment, returning to school, or active military duty, you may be eligible for deferment, which allows you to pause payments without accruing interest on certain federal loans.
Here’s how to apply:
- Determine the Type of Deferment You Need:
Some common deferment options are available for students, those facing economic challenges, unemployment, military service, cancer treatment, and other situations. - Collect the Required Documentation:
Each deferment type has its own form and may require proof such as enrollment verification, unemployment benefits, or military orders. - Fill Out and Submit the Application:
Obtain the correct deferment form from your loan servicer or studentaid.gov, fill it out, include the required documents, and submit it to your loan servicer. - Keep Making Payments Until Approved:
Your loans won’t officially be in deferment until the request is processed and accepted. To avoid missed payments, don’t stop paying until you receive confirmation.
Deferment can last from a few months to several years, depending on your eligibility. It’s typically the best choice if you have subsidized loans that don’t accrue interest during the pause.
What to Do If Your Loans Are in Default
If you’ve missed payments for an extended time, wich is usually 270 days or more for federal loans, your student loans may go into default. After a loan goes into default, you can no longer use deferment or forbearance. but, there are still ways to recover:
For Federal Student Loans:
- Loan Rehabilitation:
By making around nine scheduled payments within 10 months, you can exit loan default and become eligible for federal aid again. - Loan Consolidation:
Combine your defaulted loan into a new Direct Consolidation Loan. You’ll need to agree to an income-driven repayment plan or make three voluntary, on-time payments before consolidating.
For Private Student Loans:
Options are more limited. Many lenders won’t offer formal recovery programs. You may need to:
- Negotiate with Your Lender: Request a settlement or reduced payment plan.
- Seek Legal assistance: A student loan lawyer can assist you in managing your debt or evaluating potential bankruptcy solutions.
No matter what type of loan you have, it’s important to act quickly. Ignoring a default can lead to wage garnishment, tax refund seizure, and serious credit damage. The sooner you address it, the more options you’ll have to regain control.
