If you’re struggling to make your student loan payments, you may qualify for deferment or forbearance, two options that temporarily pause your payments. While both provide financial relief, they differ in terms of eligibility, interest accrual, and long-term cost.
This guide explains the key differences between deferment and forbearance, who qualifies, and how to choose the best option for your situation.
1. What Are Deferment and Forbearance?
Both deferment and forbearance allow you to temporarily stop making student loan payments, but they differ in how interest accumulates and who qualifies.
Key Differences: Deferment vs. Forbearance
| Feature | Deferment | Forbearance |
|---|---|---|
| Payment Pause Duration | Up to 3 years | Up to 12 months (can be renewed) |
| Interest on Subsidized Loans? | ❌ No (government pays interest) | ✅ Yes (borrower pays interest) |
| Interest on Unsubsidized Loans? | ✅ Yes (borrower pays interest) | ✅ Yes (borrower pays interest) |
| Eligibility Requirements? | ✔ Stricter (must meet specific criteria) | ✅ More flexible (easier to qualify) |
| Best For… | Economic hardship, school enrollment, military service | Temporary financial difficulties |
🚀 Key Takeaway: Deferment is the better option if you qualify because interest does not accrue on subsidized loans. Forbearance is easier to get but can cost more in the long run.
2. What is Student Loan Deferment?
How Deferment Works
Deferment pauses your student loan payments for a set period, usually up to three years, for borrowers who meet specific financial, educational, or military-related criteria.
Who Qualifies for Deferment?
✔ In-School Deferment: If enrolled at least half-time in college.
✔ Unemployment Deferment: Must be receiving unemployment benefits or actively seeking work.
✔ Economic Hardship Deferment: Based on low income or public assistance eligibility.
✔ Military Deferment: Available for active-duty military service members.
✔ Cancer Treatment Deferment: For borrowers undergoing cancer treatment and for six months after treatment ends.
Interest Accrual During Deferment
| Loan Type | Interest During Deferment? |
|---|---|
| Direct Subsidized Loans | ❌ No interest accrues |
| Direct Unsubsidized Loans | ✅ Interest accrues |
| Federal Perkins Loans | ❌ No interest accrues |
| PLUS Loans | ✅ Interest accrues |
| Private Loans | ✅ Interest accrues (depends on lender) |
📌 Example: If you have $10,000 in Direct Subsidized Loans, deferment allows you to pause payments without interest increasing—helping you avoid a larger loan balance later.
🚀 Key Takeaway: Deferment is ideal for borrowers with subsidized loans since interest does not accrue.
3. What is Student Loan Forbearance?
How Forbearance Works
Forbearance pauses or reduces student loan payments for up to 12 months at a time. However, interest continues to accrue on all loans, including subsidized loans.
Types of Forbearance
✔ General (Discretionary) Forbearance
- Granted at the lender’s discretion for borrowers facing temporary financial hardship.
- Available for Direct Loans, FFEL Loans, and Perkins Loans.
✔ Mandatory Forbearance (Must Be Approved)
- Medical Residency Forbearance: For doctors in medical internships or residencies.
- National Guard Forbearance: For National Guard members not eligible for military deferment.
- Teacher Loan Forgiveness Forbearance: If working toward Teacher Loan Forgiveness eligibility.
📌 Example: If you lose your job and do not qualify for deferment, you can apply for general forbearance to pause payments while looking for work.
🚀 Key Takeaway: Forbearance is easier to get, but it can significantly increase loan costs because interest always accrues.
4. Pros and Cons of Deferment vs. Forbearance
✅ Pros of Deferment
✔ No interest accrual on subsidized loans (saves money).
✔ Longer payment pause (up to 3 years) compared to forbearance.
✔ Best for long-term financial hardship (e.g., unemployment, school enrollment).
❌ Cons of Deferment
❌ Strict eligibility requirements—not everyone qualifies.
❌ Interest accrues on unsubsidized loans, increasing total debt.
✅ Pros of Forbearance
✔ Easier to qualify for—approval is often at the lender’s discretion.
✔ Good for temporary financial issues (e.g., job loss, medical emergency).
✔ Prevents loan default and credit score damage.
❌ Cons of Forbearance
❌ Interest accrues on all loans, including subsidized ones.
❌ Shorter duration (only 12 months at a time, though it can be renewed).
🚀 Key Takeaway: Deferment is better if you qualify, but forbearance is easier to obtain.
5. How to Apply for Deferment or Forbearance
Step 1: Contact Your Loan Servicer
- Log in to studentaid.gov to find your loan servicer’s contact information.
- Ask about your eligibility for deferment or forbearance.
Step 2: Submit the Correct Application Form
- For Deferment: Complete a deferment request form (e.g., In-School Deferment, Economic Hardship Deferment).
- For Forbearance: Submit a general or mandatory forbearance request to your loan servicer.
Step 3: Continue Making Payments Until Approved
- Keep making payments until your deferment or forbearance is officially approved to avoid late fees or default.
🚀 Key Takeaway: Applying is free—just contact your loan servicer and complete the necessary paperwork.
6. When Should You Choose Deferment Over Forbearance?
Choose Deferment If:
✔ You qualify based on financial hardship, school enrollment, or military service.
✔ You have subsidized loans, so interest won’t accrue.
✔ You need a longer pause (up to 3 years).
Choose Forbearance If:
✔ You do not qualify for deferment but need temporary relief.
✔ You expect your financial hardship to improve within 12 months.
✔ You are okay with paying accrued interest later.
🚀 Key Takeaway: Deferment saves money on interest if you qualify, while forbearance is a short-term fix with higher long-term costs.
Final Thoughts: Deferment vs. Forbearance—Which Is Right for You?
Both deferment and forbearance help borrowers struggling with student loan payments, but they work best in different situations.
✅ Choose Deferment If:
✔ You have subsidized loans and want to avoid interest accrual.
✔ You meet eligibility requirements (school, unemployment, military, hardship).
✔ You need long-term relief (up to 3 years).
❌ Choose Forbearance If:
❌ You do not qualify for deferment but need short-term relief.
❌ You expect your financial hardship to end soon.
❌ You understand interest will continue accruing on all loans.
💡 Final Tip: If you need temporary relief, deferment is the better option if you qualify. If not, forbearance is a backup solution but can cost more over time. 🚀
