How Many Times Can You Defer Student Loans
How many times can I defer my student loans?
In general, you can defer your student loans up to three times before being denied. There are some exceptions to this rule, however, so it’s important to be aware of them.
If you’re a first-time borrower who entered repayment in Oct. 1, 1993 or after, then your maximum deferment period is three years. If you had an existing loan when you entered repayment on or after Oct. 1, 2006, then your maximum deferment period is six years. If you are a parent PLUS borrower or consolidated loan borrower and have been in repayment five years or less, then your maximum deferment period is three years. And finally, if you are a parent PLUS borrower or consolidated loan borrower and have been in repayment six years or less and are eligible for Public Service Loan Forgiveness (PSLF), then your maximum deferment period is four years.
How Many Times Can You Defer Student Loans
A student loan deferment lets you stop making payments on your loan or reduce the amount you pay for up to three years, in some cases. No interest accrues on federally subsidized loans during the deferment period because the government picks up the interest payments. But interest on unsubsidized loans does accrue and is added to the amount due at the end of the deferment period.1
Deferment is considered a temporary measure. If you foresee that you’ll be unable to resume your student loan payments in three years or less, you should consider an income-driven repayment (IDR) plan instead. The information in this article is based on the usual principles of student loan deferment, not the special regulations around the COVID-19 pandemic.
KEY TAKEAWAYS
Student loan deferment lets you stop making payments on your loan for up to three years, in some cases, but it does not forgive the loan.
You must apply (and qualify) for deferment unless you are enrolled in school at least half-time.
Interest on federally subsidized loans does not accrue during the deferment.
Interest on unsubsidized loans does accrue during deferment and is added to your loan at the end of the deferral period.
Deferment on private student loans varies by lender, and not all lenders offer it.
Should You Defer Your Student Loan Payments?
When deciding whether to pursue student loan deferment, you should ask yourself the following questions:
Do I have subsidized federal loans or Perkins loans? Interest on federally subsidized loans and Perkins loans does not accrue during the deferment period. If your loans are unsubsidized federal loans or private loans, interest will likely accrue unless you pay it while in deferment.1
Can I afford to make a reduced loan payment? If you can’t pay anything, deferment may provide some breathing room until you restart payments. If you need a long-term lower payment, an IDR plan may make more sense.
Will I be able to restart payments on my student loans soon? If you can, deferment may be a good way to get over a temporary financial bump in the road. If you don’t see any way to make payments down the road, deferment is not a good option.
You can’t simply stop making payments on your student loans and declare yourself in deferment. You must qualify, which involves working with your loan servicer or lender and, in most cases, filing an application.
Your loan servicer or lender will process your application, let you know if more information is needed, and tell you whether you qualify. It’s important to continue making timely payments on your loans while you await a decision. Failure to do so could ultimately result in loan default and a serious blow to your credit score.3
Federal Student Loan Deferment
Most federal student loan deferments require that you apply. One type, known as in-school deferment, is automatic if you are enrolled at least half-time. If you believe you qualify for a deferment based on the other categories listed below, you will need to apply.1
To do that, go to the U.S. Department of Education’s Federal Student Aid Repayment forms website, click on Deferment, and retrieve an application for the type of deferment for which you believe you qualify.4
Private Student Loan Deferment
To defer a private student loan, you’ll need to contact your lender directly. Many offer some form of deferment or relief if you are enrolled in school, serving in the military, or unemployed. Some also provide deferment for economic hardship.1
As with unsubsidized federal loans, in most cases, any deferment of a private loan comes with accrued interest that capitalizes at the end of the deferment period. You can avoid this by paying the interest as it accrues.
Forbearance is another way to put off repayments for a period of time. But, as with deferment, it’s only a temporary fix. An income-driven repayment plan may be a better option if you expect your financial difficulty to continue.5
Types of Federal Student Loan Deferment
The following deferment types apply to federal student loans. As noted, some private lenders also offer payment relief, but the types, rules, and requirements vary by lender.
In-School Student Deferment
This is the only automatic deferment offered by the federal government. It comes with the requirement that you attend school at least half-time.
If you have a subsidized or unsubsidized Direct or federal Stafford student loan, or if you are a graduate or professional student with a Direct PLUS or FFEL PLUS loan, your loan will remain on pause until six months after you graduate or leave school. All others with PLUS loans must begin repaying as soon as they leave school.
If you don’t receive an automatic deferment, ask your school’s admissions office to send your enrollment information to your loan servicer.1
In-School Parent Deferment
If you are a parent who took out a Direct PLUS or FFEL PLUS loan, and the student for whom you took out the loan is enrolled at least half-time, you are also eligible for deferment, but you must request it.
Your deferment comes with the same six-month grace period afforded to students mentioned above. There is no time limit for either type of in-school deferment.1
Unemployment Deferment
You may request deferment for up to three years if you become unemployed or are unable to find a full-time job. To qualify, you must be either receiving unemployment benefits or seeking full-time work by registering with an employment agency.1 You must also reapply for this deferment every six months.6
Economic Hardship Deferment
Economic hardship deferment is available for up to three years if you receive state or federal assistance, including through the Supplemental Nutrition Assistance Program (SNAP) or Temporary Assistance for Needy Families (TANF). The same applies if your monthly income is less than 150% of your state’s poverty guidelines.1 You must reapply for this deferment every 12 months.7
Peace Corps Deferment
A deferment of up to three years is also available if you are serving in the Peace Corps. Although Peace Corps service is considered an economic hardship, it does not require you to reapply during the deferment period.17
Military Deferment
Active duty military service in connection with a war, military operation, or national emergency can qualify you for student loan deferment as well. This can include a 13-month grace period following the end of your service or until you return to school on at least a half-time basis.1
Cancer Treatment Deferment
If you have cancer, you can request deferment of your student loan debt during treatment and for six months following the conclusion of treatment.1
Other Deferment Options
If you don’t qualify for one of the types of deferment just listed, you still may qualify for one of the following:
Graduate fellowship deferment if you are enrolled in an approved program
Rehabilitation training deferment if you are enrolled in an approved rehabilitation training program
Perkins loan forgiveness deferment if you received a Perkins loan and are working toward the cancellation of that loan
Additional/enhanced deferment options if you have a pre-July 1, 1993, Direct or FFEL Program loan. Contact your loan servicer for details.1
forbearance vs deferment
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 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.