Who Qualifies for Student Loan Deferment?
Federal student loan deferment is available for several situations: enrollment in school at least half-time, graduate fellowship programs, approved rehabilitation training, unemployment or economic hardship, active military service, and cancer treatment. Each type has specific eligibility requirements and maximum durations. Borrowers must apply through their loan servicer and provide documentation of their qualifying circumstance to receive approved deferment status.
Does Interest Accrue During Deferment?
It depends on your loan type. Subsidized federal loans do not accrue interest during deferment — the government pays it for you. Unsubsidized federal loans, PLUS loans, and most private loans continue accruing interest during deferment. If you can afford to pay at least the interest during deferment, doing so prevents your loan balance from growing, known as interest capitalization, which significantly increases the long-term cost of the loan.
How Is Deferment Different from Income-Driven Repayment Plans?
Deferment completely pauses payments for a set period. Income-driven repayment (IDR) plans reduce payments to a percentage of your discretionary income on an ongoing basis. IDR payments, even very small ones, count toward loan forgiveness timelines. Deferment typically does not count toward forgiveness. For borrowers pursuing public service or IDR forgiveness, staying on a repayment plan — even at zero payment — is usually better than entering deferment.
Frequently asked questions
Can I defer private student loans?
Private lenders are not required to offer deferment, but many do provide hardship options or short-term forbearance. Terms vary significantly by lender. Contact your private loan servicer directly to explore options. Federal deferment protections do not apply to private loans, so reviewing your promissory note terms is important.
Does deferment affect my credit score?
An approved deferment should not negatively impact your credit score — your account is typically reported as current and in good standing. If interest capitalizes when deferment ends and increases your balance significantly, it may affect your overall debt profile, but deferment itself is not a negative credit event.