Student Loans in Deferment & Forbearance: What You Need to Know

Surprising fact: about one in four borrowers pauses payments at some point, so knowing the difference between deferment and forbearance can save me real money.

I need clear, up-to-date info so I can pick the right option when cash runs short. Deferment and forbearance both pause payments, but they work very differently for interest and long-term repayment.

In plain terms, deferment can be interest-free for subsidized federal loans, while forbearance lets interest accrue on all loans. Many deferments last up to three years; most forbearances come in 12-month chunks and can sometimes be applied retroactively if I’ve missed payments but not defaulted.

I should also watch upcoming rules: new federal borrowers after July 1, 2027, may face tighter forbearance limits. Private lenders follow different rules and interest always accrues, so I must check my servicer and keep paying until approval.

For a quick guide and the forms I’ll need, see this helpful overview on deferment and forbearance options.

Key Takeaways

• Deferment may stop interest on subsidized federal loans; forbearance usually does not.
• Deferments can last longer; forbearance is often short-term and renewable.
• Some relief can be applied retroactively if I’m behind but not in default.
• Private loans always accrue interest—expect different rules and costs.
• Apply through my loan servicer with the correct form and keep paying until approved.

Deferment vs. Forbearance at a Glance: How I Decide What Fits My Situation

A quick side-by-side helps me pick the best short-term fix for my loan payments.

Core difference: deferment is best if I meet specific triggers and have subsidized loans. Forbearance is the fallback when I don’t qualify and need a short pause.

Key differences: payment pauses, interest, qualification

• Deferment often requires events like half‑time school, unemployment, SNAP/TANF, military or Peace Corps service, cancer treatment, or income under 150% of poverty.
• Forbearance comes in two types: general (servicer discretion) and mandatory (must be granted for certain situations).
• Interest: interest accrues on all loans during forbearance; subsidized federal student loans usually don’t accrue interest during deferment.

Credit impact and retroactive relief

Neither option should show as negative on my credit if approved. But missed payments before approval can hurt my score.

“If I’m behind but not in default, servicers can sometimes apply approved relief retroactively to clear delinquency.”

Feature	Deferment	Forbearance
Typical trigger	School, unemployment, hardship	Short-term hardship, servicer discretion
Interest behavior	No interest on subsidized loans	Interest accrues on all loans
Use case example	Prolonged job search	Sudden medical bill

Eligibilities Compared: When I Qualify for Student Loan Deferment or Forbearance

I want a clear checklist so I know exactly when I can pause payments and what proof I’ll need. Below I list the common eligibility triggers, special cases, and what documentation servicers usually ask for.

When I can request deferment

Deferment commonly applies if I’m in one of these situations:

• Enrolled at least half-time in school — many federal student loans get this automatically, but I still confirm with my servicer.
• Unemployed (often up to three years) or facing economic hardship, including income below 150% of the poverty guideline.
• Serving in the military, Peace Corps, or undergoing approved cancer treatment (plus six months after treatment).
• Parent PLUS borrowers: defer while the student is enrolled at least half-time and for six months after enrollment ends.
• Graduate fellowship or approved rehabilitation training — requires program verification.

When forbearance may be an option

Forbearance comes in two types. General forbearance is discretionary — my servicer can grant it for short-term financial hardship or job transitions. Mandatory forbearance must be granted for defined situations, like AmeriCorps service, medical residency, National Guard activation, or when payments exceed 20% of my monthly income.

“Gather proof of enrollment, unemployment benefits, income statements, or letters verifying service to speed approval.”

Quick tips: Check how much time each option uses toward limits, apply early, and keep making payments until I have written approval.

How Long I Can Pause Payments and What It Costs Me in Interest

I want a clear timeline for how long I can pause payments and what interest will do to my balance. This helps me weigh short-term relief against long-term cost.

Time limits today: Many types of deferment can last up to about three years depending on the reason (unemployment or economic hardship often hit that cap). Forbearance is usually approved in up to 12-month increments. I can reapply if I still need help, but repeated approvals aren’t guaranteed.

Interest rules and capitalization

During deferment, interest does not accrue on subsidized federal loans and Perkins. However, interest accrues on unsubsidized loans even in deferment. In forbearance, interest accrues on all loans.

Why this matters: unpaid interest can capitalize when I return to repayment. That raises my principal and increases future monthly payments.

Looking ahead: proposed 2027 caps

For borrowers who take new federal loans on or after July 1, 2027, proposed rules would cap most forbearances at nine months within any two-year period. That change could limit how often I can use forbearance and make planning more urgent.

“Consider paying interest each month while paused to avoid capitalization later.”

Feature	Typical limit	Interest behavior
Deferment	Up to ~3 years (varies by type)	No interest on subsidized; yes on unsubsidized
Forbearance	Usually up to 12 months per approval	Interest accrues on all loans
Proposed 2027 cap	Most forbearances: 9 months in any 2-year period (new loans)	Same accrual rules; fewer pause options

• If I must pause, I often pay interest monthly to limit capitalization.
• Repeated short forbearances can cost more than a single deferment if I qualify for deferment.
• I check my remaining eligibility before applying so I don’t run out when I need relief most.

student-loans-in-deferment-and-forbearance: A Side-by-Side on Federal Loans

I want a simple, side-by-side checklist so I can see what is automatic and what my servicer must decide.

Availability and who decides: automatic vs. servicer discretion

Some relief is automatic. For example, in‑school deferment for federal student loans often starts when my school reports half‑time enrollment.

Other types need a decision from my servicer. General forbearance is discretionary and can be granted case-by-case.

Forms and documentation I’ll need to submit to my loan servicer

• Automatic: in‑school deferment—school enrollment verification usually triggers it.
• Deferments that require forms: unemployment, economic hardship, military, cancer treatment, Parent PLUS—each has its federal form and proof.
• Forbearance tracks: general (one standard request form) and mandatory (must be granted for qualifying programs like AmeriCorps, medical residency, certain military duty, or when payments exceed 20% of income).
• Document checklist: enrollment letter, unemployment benefits statement, income proof, and program/service verification.

“Submit the correct form to your loan servicer, keep paying until approval, and verify the effective start date.”

Calculating the Real Cost to Me: Deferment vs. Forbearance Examples

Before I pause payments, I plug numbers into a quick formula to see what interest will add to my balance.

When interest accrues and how unpaid interest can capitalize

Key rule: during forbearance, interest accrues on all federal loans. During deferment, interest accrues on unsubsidized loans but not on subsidized ones.

If I don’t pay accrued interest, servicers may capitalize it when repayment resumes. That raises my principal and makes future interest higher.

Simple scenarios to estimate added interest

I use this short formula: monthly interest = principal × APR ÷ 12. Then multiply by paused months to estimate added interest.

• Example: a $20,000 unsubsidized loan at 6% for 6 months adds about $600 (20,000 × 0.06 ÷ 12 × 6).
• Multiple short pauses stack. Each capitalization event can push my balance and future loan payments higher.

“Try to make small interest-only payments while paused to avoid capitalization and limit long-term cost.”

Tip: run this math for my loan and compare it to an income-driven plan before choosing deferment or forbearance.

How I Apply through My Loan Servicer and What to Do While I Wait

I start by matching my situation to the exact federal form so my request won’t get held up. That step cuts processing time and lowers the chance of missed deadlines.

Deferment: choosing the right federal form

I pick the correct student loan deferment form for my case—in-school, unemployment, economic hardship, military, cancer treatment, graduate fellowship, rehabilitation training, or Parent PLUS.

I gather proof first: enrollment letters, benefit statements, income docs, or service verification. Sending a complete packet to my loan servicer speeds approval.

Forbearance: general vs. mandatory and documents

For loan forbearance, I choose between general (servicer discretion) and mandatory (must be granted for specific types like AmeriCorps or medical residency).

Both require a request form and supporting documents. I note which type I need and attach proof so the servicer can process my request quickly.

Staying current until approval and confirming dates

I keep making my minimum payment until I get written approval and see the effective date posted. If interest will accrue, I try to pay interest monthly to avoid capitalization.

• I submit forms to my loan servicer and track the request online.
• I keep copies and set reminders to re-certify before any relief expires.
• I contact customer service politely if timelines slip and ask about retroactive relief for recent missed payments.

“If I’m delinquent but not in default, servicers can sometimes apply approved relief retroactively to clear the record.”

Private Student Loans: What Changes and What Stays the Same

Private lenders play by different rules, so I treat every relief request like a negotiation. I check what options my lender actually offers and budget for the cost: private pauses almost always let interest continue to grow.

Deferment, forbearance, and other short-term choices

Many private lenders may offer in-school or military deferment and limited forbearance, but interest accrues on all loans. That means loan payments can rise later if unpaid interest capitalizes.

Other relief I can request

I ask my servicer about interest-only periods, a temporary rate reduction, or short payment relief. If options are thin, refinancing could lower my monthly payment, but refinancing federal debt into private loans forfeits federal protections.

“Contact your servicer directly, map expected interest during any pause, and choose the option that fits your short-term budget and long-term plan.”

• I confirm how many months of private forbearance may be available and whether it can be split.
• I estimate accrued interest and decide if interest-only payments fit my budget.
• I prepare a brief script to explain my situation and the payment I can afford right now.

Conclusion

When I need a pause, I focus on the option that limits added interest and keeps me on track.

I choose deferment first when I qualify, especially for subsidized loans, because it can pause payments without adding interest. If I don’t qualify, I treat forbearance as a short-term fix and budget for the extra interest that will accrue.

I apply early, use the right form, and keep making at least my minimum payment until my servicer confirms the start date. If my hardship will last, I consider an income-driven repayment plan to protect my balance and progress on repayment.

I contact my servicer about options, document eligibility, and set reminders to renew relief if needed. For private loans, I call the lender to learn exact terms since interest usually keeps growing.

FAQ

What’s the main difference between deferment and forbearance?

Deferment pauses required payments and, for subsidized federal loans, can stop interest from accruing. Forbearance also pauses or reduces payments but interest generally continues to grow on all loan types. I weigh how long I need relief and whether interest will add to my balance before I choose one.

Will using deferment or forbearance hurt my credit?

No—if my servicer approves the pause, payments are not reported as late. However, if I stop paying without approval, missed payments can damage my credit and push me toward default. I always contact my servicer first and get approval in writing.

Who decides if I qualify: the Department of Education or my loan servicer?

For federal loans, eligibility rules come from the Department of Education, but my loan servicer reviews and approves applications. With private loans, each lender sets rules and discretion is usually with the servicer or bank.

What are common triggers for deferment?

I can qualify for deferment if I’m enrolled at least half-time, unemployed, facing economic hardship, serving in the military, doing Peace Corps work, receiving cancer treatment, participating in a graduate fellowship, or if my income is under certain poverty thresholds. Parent PLUS deferments have timing rules tied to the student’s status.

What types of forbearance exist and when do I use them?

There are mandatory forbearances I’m automatically eligible for in certain situations and discretionary (general) forbearances my servicer may grant for financial hardship, illness, or other reasons. I use mandatory when I meet statutory conditions and general when I need short-term help but don’t meet a specific rule.

How long can I pause payments with deferment or forbearance?

Typical deferments can last up to about three years depending on the type. Forbearance is often approved in blocks (commonly up to 12 months at a time) and can be renewed, though policies and limits vary by program and servicer.

How does interest behave during each pause?

Subsidized federal loans don’t accrue interest during eligible deferments. Unsubsidized federal loans and most private loans accrue interest during deferment and all forbearances. If I don’t pay that interest, it can capitalize—meaning interest gets added to my principal—raising future costs.

Are there upcoming changes I should know about?

There have been proposals to cap how long forbearance can be used for new federal loans and to limit repeated use. I watch loan servicer notices and federal updates for any 2027 rule changes that could affect caps or eligibility.

What paperwork will my servicer require to approve a deferment or forbearance?

I typically submit forms specific to the reason—proof of enrollment for in-school deferment, unemployment documentation, military orders, or income statements for hardship. For forbearance, a written request explaining the hardship plus any lender-specific forms usually suffices.

If I’m behind on payments, can I apply retroactively for relief?

In some cases I can request retroactive deferment or forbearance to cover past missed payments and avoid default. Servicers review circumstances case by case, so I contact them promptly and provide documentation to support retroactive approval.

How do I estimate the extra cost if interest keeps accruing?

I calculate added interest by multiplying the loan balance by the interest rate and the pause length (years). Even a few months can add up on unsubsidized loans. Many servicers offer online calculators, or I can ask them for an estimate to compare options.

What should I do while my application is pending?

I try to make payments until approval to stay current. If I can’t, I document my attempts and keep copies of correspondence. After approval, I confirm the effective date and request a written statement showing how interest and payments were handled during the pause.

How do private loan options differ from federal ones?

Private lenders rarely offer subsidized deferments; interest almost always accrues. They may offer alternative relief like interest-only payments, temporary rate reductions, or loan modification. I compare those options to refinancing or federal programs before deciding.

Can unpaid interest capitalize after deferment or forbearance ends?

Yes. If interest accrues during the pause and I don’t pay it, that interest can be added to my principal when normal payments resume. Capitalization increases monthly payments and total interest, so I try to pay interest during the pause if possible.

Should I refinance instead of using deferment or forbearance?

Refinancing might lower my rate but often removes federal protections like income-driven repayment, deferment, and Public Service Loan Forgiveness eligibility. I weigh long-term benefits and protections before refinancing federal loans.

How does Parent PLUS timing affect deferment eligibility?

Parent PLUS borrowers have specific timing rules—deferment typically ties to the student’s enrollment status and ends when the student drops below half-time or graduates. I check my servicer’s guidelines to confirm exact timing and documentation needed.

If I have a disability or serious illness, what options do I have?

I can qualify for disability-based deferment, discharge, or forbearance depending on my condition and documentation. For serious medical treatment like cancer care, servicers often allow special deferments or forbearance with physician statements or medical records.

How do I balance short-term relief with long-term cost?

I look at how long I need help, whether interest will accrue, and how capitalization affects future payments. If I only need a few months, forbearance may be fine. If I expect longer disruption, deferment (if eligible) or enrolling in an income-driven plan might reduce long-term costs.