10 Types of Student Loan Deferment and Forbearance 

If you’re facing financial difficulties or in a transitionary period of your life, you might need a way to make student loan repayment bearable. Two temporary options that are available are student loan deferment and forbearance.

Deferment vs. forbearance

Deferment and forbearance are two distinct terms that roughly mean the same thing. They’re ways to postpone student loan payments for a prearranged period of time. Though the terms mean similar things, there are some important differences.

Generally speaking, when your federal loans are in deferment, interest might not accrue on your student loans. In forbearance, interest does accrue during this period.

There are also various types of deferment and forbearance that are specific to certain situations. Each option has its own eligibility requirements that must be met to pause payments.

Federal student loan deferment options

Federal loan borrowers have numerous options when it comes to student loan deferment.

1. In-School Deferment

You might’ve already taken advantage of deferment and not even realized it. One of the most common types of deferment is In-School Deferment. As its name suggests, it’s a type of deferment that students utilize while in school. Under in-school deferment, you’re not required to make payments toward your federal student loans while you’re actively enrolled in school.

This can be a relief if you aren’t working while in school. It also offers you peace of mind if you don’t want to worry about loan repayment while you’re focusing on satisfactory academic progress or studying for finals.

Eligibility requirements:

• Enrolled in an eligible college at least half-time.
• Available to  Direct, FFEL and Perkins Loan borrowers.

Pros:

• Don’t have to make student loan payments while in school.
• Can focus your attention on completing your academic program or degree.

Cons:

• You’re responsible for interest charges that accrue for unsubsidized or PLUS Loans.

How to get started

Typically, this type of deferment is granted automatically if you’re enrolled in school at least half-time. If this type of deferment isn’t automatically set by your loan servicer while you’re actively enrolled, submit an In-School Deferment Request.

2. Graduate Fellowship Deferment

Graduate students who are pursuing a master’s or doctoral degree might qualify for a Graduate Fellowship Deferment. This type of deferment is geared toward graduate fellows who’ve received some sort of financial assistance — typically doctoral students. However, some master’s degree students might qualify as well.

Eligibility requirements:

• Have a graduate fellowship.
• Pursuing a doctoral program.
• Some master’s students may qualify.
• Available to Direct, FFEL or Perkins Loan borrowers.

Pros:

• No monthly payments necessary while pursuing a graduate fellowship.
• Opens up time and financial resources for graduate school.

Cons:

• Interest might accrue on your student loans if you have unsubsidized loans or PLUS Loans.

How to get started

Submit the Graduate Fellowship Deferment Request form to your loan servicer.

3. Parent PLUS Borrower Deferment

Parents can take on student loans on their child’s behalf through Parent PLUS Loans. But since you’re not the one going to school, you won’t qualify for the in-school deferment.

The Parent PLUS Borrower Deferment is available while your child’s in school at least half-time and for the first six months after they complete their education. It’s ideal for parents who borrowed loans for their child’s education, and who are also juggling multiple financial priorities such as retirement and caregiving while their child is still enrolled in school.

Eligibility requirements:

• Must be a Parent PLUS borrower.
• Child/student must be enrolled half-time or more at their university or during the first six months of the student leaving school.
• Available to Direct, FFEL and Parent PLUS borrowers.

Pros:

• Parent borrowers can focus on saving for retirement while their child is in school.
• Offers additional time to look into repayment options and strategies.

Cons:

• Interest might accrue on your Parent PLUS Loans during deferment.
• PLUS Loans have higher interest rates, meaning deferment could be costly over time.

How to get started

Submit the Parent PLUS Borrower Deferment Request Form to your loan servicer.

4. Economic Hardship Deferment

If you’re dealing with financial hardship and it’s hard to make ends meet, you might qualify for an Economic Hardship Deferment.

This option is available for borrowers who need respite from making loan payments but want a Standard Repayment Plan after the deferment period. For example, if your income is below 150% of your state’s poverty level and you rely on government relief resources, like Temporary Assistance for Needy Families, or while serving in the Peace Corps.

Eligibility requirements:

• You’re currently a Peace Corps volunteer, or
• You’re on public assistance, such as welfare, or
• Your income meets certain poverty guidelines.
• Available to Direct, FFEL or Perkins Loan borrowers.

Pros:

• Can defer student loans up to three years.
• Frees up money for other required life expenses.

Cons:

• Interest might accrue on your student loans if you have unsubsidized or PLUS Loans.
• Other options might be a better, long-term repayment strategy (e.g. income-driven repayment plan where payments also count toward student loan forgiveness).

How to get started

Submit the Economic Hardship Deferment Request Form to your loan servicer.

5. Unemployment Deferment

If you’re struggling to find full-time work and receive unemployment benefits, you might qualify for unemployment deferment. This can be a much-needed benefit to help you manage your finances during this difficult time.

Eligibility requirements:

• Struggling to obtain full-time work.
• Currently receiving unemployment benefits.
• Available to Direct, FFEL and Perkins Loan borrowers.

Pros:

• Deferment is available for up to three years.
• Removes stress around student loan debt and frees up money for basic expenses.

Cons:

• Interest accrues on unsubsidized and PLUS Loans.
• You won’t make progress toward student loan forgiveness while on deferment.

How to get started

You can submit the Unemployment Deferment Request to your loan servicer.

If you’re in student loan forgiveness at all, going on an income-driven repayment plan is better in the long-term as even $0 payments count toward forgiveness. If you earn no money, you’re nearly guaranteed a $0 qualifying monthly payment amount.

6. Military Service and Post-Active Duty Student Deferment

Service members in the military, or who’ve completed their service and want to enroll at least half-time in school, can request Military Service and Post-Active Duty Student Deferment. This deferment option lasts 13 months after active duty service.

Eligibility requirements:

• Currently on active duty in the military, or
• Have completed military service recently.
• Available to Direct, FFEL and Perkins Loan borrowers.

Pros:

• Puts student loan repayment on hold while serving in the military.
• May lessen financial stress in an already stressful situation.

Cons:

• Interest accrues on unsubsidized and PLUS Loans.

How to get started

Submit the Military Service and Post-Active Duty Student Deferment Request form to your loan servicer.

7. Cancer Treatment Deferment

Getting diagnosed with cancer can be a harrowing experience filled with stress. The last thing you want to think about is your student loans. A Cancer Treatment Deferment is available for the entirety of your cancer treatment and six months afterward.

If you’re taking a break from employment to participate in an eligible rehabilitation program, this might be a realistic way to get relief from loan payments.

Eligibility requirements:

• Must be diagnosed with cancer and in treatment.
• A physician must sign off on deferment form.
• Available to Direct, FFEL and Perkins Loan borrowers.

Pros:

• Puts student loan payments on hold during the entire duration of cancer treatment.
• Has a six-month period after treatment where loan payments are on hold.
• Eliminates one financial worry during this stressful time.
• Might not need to pay interest during this time.

Cons:

• Only available for 12-month intervals and must be renewed, if needed.
• These loans will accrue interest that borrowers are responsible for: Federal PLUS Loans, Federal Unsubsidized Consolidation Loans, Federal Supplemental Loans for Students (SLS), National Direct Student Loans (NDSL), and National Defense Student Loans (Defense Loans).

How to get started

Submit the Cancer Treatment Deferment Request to your loan servicer.

8. Rehabilitation Training Deferment

If you’re currently in a rehabilitation training program that’s geared toward helping mental health, addiction or alcohol, you can postpone student loans through the Rehabilitation Training Deferment.

Eligibility requirements:

• Be in an approved rehabilitation training program.
• Must be centered around vocation, mental health or substance abuse.
• Rehabilitation training must last at least three months to qualify.
• Available to Direct, FFEL and Perkins Loan borrowers.

Pros:

• Pauses payments while you’re getting much-needed support.
• Covers the duration of your treatment.

Cons:

• Interest accrues on unsubsidized or PLUS Loans.

How to get started

Submit the Rehabilitation Training Deferment Request to your loan servicer.

Federal student loan forbearance options

Aside from the deferment options listed above, there are also forbearance options for federal loan borrowers. Typically, you’ll need to pay back interest that accrues while your loans are in forbearance.

9. General forbearance

General forbearance is a temporary student loan relief option that’s useful if you’re not pursuing student loan forgiveness. it’s sometimes referred to as discretionary forbearance, since this type of forbearance is available at your loan servicer’s discretion.

Eligibility requirements:

It’s up to your loan servicer to determine whether you qualify for general forbearance, but common reasons include:

• Medical costs.
• Employment situation has shifted, such as job loss or income reduction.
• Financial hardship.
• Other reasons that the loan servicer might deem worthy.
• Available to Direct, FFEL and Perkins Loan borrowers.

Pros:

• Forbearance can be offered for up to 12-month increments, with a total three-year limit.
• Can alleviate financial worry regarding student loan payments for the short term.

Cons:

• Interest might accrue on your student loans.
• Must be approved by loan servicer, not guaranteed.

How to get started

Submit the General Forbearance Request to your loan servicer.

10. Mandatory forbearance

Unlike general forbearance which is at the discretion of your loan servicer, a mandatory forbearance must be approved if you meet certain eligibility requirements.

Mandatory forbearance is only provided in certain situations, as shown in the eligibility section below. It can provide needed financial relief now as a short-term option; however, if you’re pursuing loan forgiveness, an income-driven repayment plan is a better long-term option.

Eligibility requirements:

• Work as an AmeriCorp volunteer,
• Be in a medical residency or dental internship,
• Serve in the National Guard,
• Qualify for the Department of Defense Student Loan Repayment Program,
• Have student loan debt payments exceed your gross income by 20% of more, or
• You’re working toward Teacher Loan Forgiveness.
• In most cases, only Direct or FFEL Loan borrowers qualify.

Pros:

• Request must be approved if you meet eligibility requirements.
• Available for up to 12-months per request.

Cons:

• Only available for very specific situations.
• Interest might accrue on your student loans.

How to get started

Submit a Mandatory Forbearance request form based on your unique circumstance.

Private student loan deferment and forbearance

All of the student loan deferment and forbearance options listed above are for federal student loans. Unfortunately, private student loans are ineligible for these programs, and your options are dependent on your private lender.

Many private lenders offer some type of deferment and forbearance, but it might not be as generous with the offered deferment timeframe or eligible situations. It’s best to reach out to your lender for next steps.

The bottom line

Private loan borrowers might be at the mercy of their lenders, but federal borrowers have many student loan deferment and forbearance options.

However, in many cases, it makes sense to opt for an income-driven repayment plan especially if you can score a $0 payment. If you need a high-level strategy on how to manage your student loans, book a consultation.