📋 This guide is for educational purposes only and not financial or legal advice. Consult a licensed professional for your specific situation.

Student loan payments can feel overwhelming, especially during unexpected life changes. If you're struggling to make payments, forbearance and deferment are two options that can temporarily pause your obligations. They aren't identical. Understanding the differences is critical for your long-term financial stability. Choosing the wrong one can cost you hundreds or even thousands of dollars in extra interest.

Quick answer: Deferment is generally the better option because interest usually doesn't accrue on subsidized federal loans during the deferment period. Forbearance, while easier to get, typically accrues interest on all loan types, increasing your total debt. You'll need to meet specific eligibility criteria for each, so check your loan type and personal circumstances before applying.

Understanding Student Loan Deferment

Deferment lets you temporarily postpone your student loan payments. It's often granted for specific situations like returning to school, unemployment, or economic hardship. The key benefit of deferment, especially for subsidized federal loans, is that the government pays the interest that accrues during the deferment period. This means your loan balance won't grow during that time. Unsubsidized federal loans and private loans typically still accrue interest during deferment.

To qualify for a deferment, you'll need to meet strict criteria. For example, if you're enrolled at least half-time at an eligible school, you'll likely qualify for an in-school deferment. Other common deferment types include unemployment deferment (if you're looking for full-time work, typically for up to three years), economic hardship deferment (if you receive certain public assistance or have an income below 150% of the poverty line), and military service deferment. You'll need to apply through your loan servicer and provide documentation to prove your eligibility. It's a formal process.

Let's say you've $30,000 in federal subsidized loans at a 5% interest rate. If you defer for 12 months, you wouldn't accrue any interest on those subsidized loans. Your balance remains at $30,000. This saves you approximately $1,500 in interest over that year. You can explore different debt management strategies, including understanding how to avoid common pitfalls, by reading our guide on avoiding debt traps.

What to Know About Forbearance

Forbearance also allows you to temporarily stop or reduce your student loan payments. It's generally easier to obtain than deferment because the eligibility requirements are less stringent. You can typically request forbearance if you're experiencing financial difficulty, medical expenses, or other approved reasons. The significant downside to forbearance is that interest accrues on all types of loans (subsidized, unsubsidized, and private) during the forbearance period. This means your loan balance will increase, making your total debt larger when you resume payments.

There are two main types of forbearance: general forbearance and mandatory forbearance. General forbearance is discretionary, meaning your loan servicer can approve it based on your financial hardship. They don't have to. Mandatory forbearance, on the other hand, must be granted by your servicer if you meet specific criteria. This includes situations like serving in a medical or dental internship, performing national service, or being a member of the National Guard called to active duty. Typically, forbearance periods last for 12 months, and you can request it for up to 36 months total over the life of your loans.

Consider that same $30,000 loan at 5% interest. If you opt for forbearance for 12 months, you'd accrue about $1,500 in interest during that year. Your loan balance would jump to $31,500 before you even make another payment. That's a substantial difference compared to deferment.

Key Differences and Impacts

The primary difference between forbearance and deferment lies in interest accrual and eligibility. Deferment usually prevents interest from building up on subsidized federal loans, while forbearance always allows interest to accrue on all loan types. This distinction can significantly affect your total repayment amount. A 2024 study by the Consumer Financial Protection Bureau (CFPB) found that borrowers using forbearance often pay 10-20% more in total interest over the life of their loans compared to those who don't.

| Feature | Deferment | Forbearance | | :------------------ | :----------------------------------------- | :-------------------------------------------- | | Interest Accrual| No interest on subsidized federal loans; interest accrues on unsubsidized and private loans. | Interest accrues on ALL loan types. | | Eligibility | Strict criteria (e.g., in-school, unemployment, economic hardship, military service). | Financial hardship, illness, or other reasons. Easier to obtain. | | Duration | Typically up to 3 years. | Usually 12 months at a time, up to 36 months total. | | Impact on Debt | Less likely to increase total debt for subsidized loans. | Almost always increases total debt. |

Another key aspect is the impact on your credit score. Both options temporarily pause payments, which can prevent you from becoming delinquent or defaulting, protecting your credit. However, since forbearance can lead to a higher overall debt due to accruing interest, it might take longer to pay off your loans, potentially impacting your debt-to-income ratio for future borrowing. It's a factor many people overlook. You'll want to track your loan balances carefully. Tools like best apps for managing student loan debt can help you stay on top of your financial picture.

Which Option Should You Choose?

Deciding between forbearance and deferment depends on your specific financial situation and loan types. If you qualify for deferment, especially with subsidized federal loans, it's generally the better choice to prevent interest from adding to your principal balance. You'll save money. If you don't qualify for deferment but need to pause payments, forbearance remains an option, but you should try to make interest-only payments during the forbearance period if you can. This will minimize the increase in your total loan balance.

Fits you if you're considering deferment:

  • You're enrolled in school at least half-time.
  • You're unemployed and actively looking for work.
  • You're experiencing economic hardship or receiving public assistance.
  • You've subsidized federal loans and want to avoid interest accrual.

Skip it for now if you're considering deferment:

  • You don't meet the strict eligibility criteria.
  • You only have unsubsidized federal or private loans, where interest still accrues during deferment.
  • You can manage a reduced payment plan instead of pausing payments entirely.

Fits you if you're considering forbearance:

  • You're facing temporary financial hardship that prevents any payments.
  • You don't qualify for deferment.
  • You understand that interest will accrue and are prepared for a higher total loan cost.

Skip it for now if you're considering forbearance:

  • You qualify for deferment.
  • You can afford to make interest-only payments during a difficult period.
  • Your financial situation is long-term, suggesting income-driven repayment might be a better fit.

Always contact your loan servicer to discuss your options. They can provide precise details about your eligibility and the impact on your specific loans. Don't just pick one without talking to them first.

Sources

Last reviewed: 2026-08-21 by Editorial Team

FAQ

Can I get deferment or forbearance for private student loans?

Yes, you can often get deferment or forbearance for private student loans, but the terms depend entirely on your lender. Private lenders have their own eligibility rules and interest policies. You'll need to contact your private loan servicer directly to understand their specific options. Don't assume federal rules apply.

Will deferment or forbearance hurt my credit score?

No, neither deferment nor forbearance directly harms your credit score. In fact, by preventing missed payments, they can protect your credit from negative marks. However, if interest accrues (as it does with most forbearance and unsubsidized deferment), your total debt increases, which might impact your debt-to-income ratio and future borrowing capacity.

What happens if I don't resume payments after deferment or forbearance ends?

If you don't resume payments after your deferment or forbearance period ends, your loans will become delinquent. After 90 days of missed payments, your servicer will report this to the credit bureaus, damaging your credit score significantly. Eventually, your loan could go into default, leading to serious consequences like wage garnishment or tax refund offsets. You'll get notices before this happens, so pay attention.

Are there limits to how many times I can use these options?

Yes, there are limits. Federal student loan deferments generally have a maximum duration of three years for most types. General forbearance is typically granted for 12 months at a time, with a maximum of 36 months over the life of your loan. Once you reach these limits, you'll need to explore other repayment options or risk default.