— wp:heading {“level”:1} –> Federal Loan Deferment Eligibility Federal student loans offer a range of repayment relief options, and deferment is among the most valuable
What Is Federal Loan Deferment?
A deferment is a period during which you are not required to make payments on your federal student loans. If you have Direct Subsidized Loans, Federal Perkins Loans, or certain other subsidized loan types, the federal government may pay the interest that accrues during the deferment. For unsubsidized loans, interest continues to accrue and is typically capitalized (added to the principal balance) once the deferment ends, which increases the total amount you owe over time.
Deferment differs from forbearance in a key way: during a deferment on subsidized loans, you are not responsible for interest, whereas during forbearance you are responsible for all interest regardless of loan type. This distinction makes deferment the preferred option whenever a borrower qualifies.
General Eligibility Requirements
Eligibility for deferment depends on the type of loan you hold and the specific qualifying circumstance. Most deferments apply to loans made under the William D. Ford Federal Direct Loan Program, and many also apply to Federal Family Education Loan (FFEL) Program loans and Federal Perkins Loans. To request a deferment, you generally must:
- Hold a qualifying federal student loan (Direct, FFEL, or Perkins).
- Meet one of the specific eligibility categories recognized by the U.S. Department of Education.
- Submit a deferment request to your loan servicer, along with any required documentation.
- Continue making payments until your servicer confirms the deferment has been approved.
It is important to note that private student loans are not eligible for federal deferment. Private lenders may offer their own hardship or forbearance programs, but those are governed by the individual lender’s terms.
Qualifying Circumstances for Deferment
The Department of Education recognizes several categories of deferment. The most common include the following.
Enrollment in School
Borrowers enrolled at least half-time at an eligible institution qualify for an in-school deferment. This deferment typically applies automatically for Direct Loans, though you may need to notify your servicer if enrollment information is not reported. Enrollment in a graduate or professional program, or in a qualifying rehabilitation training program, may also qualify.
Unemployment
Borrowers who are unemployed or working less than 30 hours per week and seeking full-time employment may qualify for an unemployment deferment. This deferment is generally granted in six-month increments and can be renewed, typically for up to three years total. You may be asked to provide evidence of your job search or registration with an employment agency.
Economic Hardship
An economic hardship deferment is available to borrowers whose income falls below a certain threshold, who receive federal or state public assistance, or who serve in the Peace Corps. Eligibility is often determined by comparing your monthly income to 150 percent of the federal poverty guideline for your family size and state. This deferment is typically granted in annual increments for up to three years.
Military Service
Borrowers serving on active duty in the U.S. Armed Forces during a war, military operation, or national emergency may qualify for a military service deferment. Additionally, a post-active-duty deferment may be available for up to 13 months after the borrower’s active duty ends. These deferments are designed to support service members during and immediately after deployment.
Other Qualifying Circumstances
Additional deferment categories include:
- Graduate fellowship support for borrowers pursuing a fellowship-funded graduate program.
- Parental leave for borrowers who are pregnant or caring for a newborn or newly adopted child, generally for up to six months.
- Cancer treatment for borrowers receiving treatment for cancer, which suspends payments during treatment and for six months afterward.
- Closed school discharge or certain other administrative circumstances that may temporarily pause repayment.
How to Apply for a Deferment
Applying for a deferment begins with contacting your loan servicer, the company that manages your federal student loan account. Most servicers allow you to submit a deferment request online, by mail, or over the phone. You may be required to complete a specific form, such as the Economic Hardship Deferment Request or the Unemployment Deferment Request, depending on your circumstance.
Documentation requirements vary. For example, an unemployment deferment may require proof of job search activity, while an economic hardship deferment may require income verification. Providing complete and accurate information helps avoid delays in processing.
Key Considerations Before Requesting Deferment
While deferment can provide welcome relief, borrowers should weigh several factors:
- Interest accrual: On unsubsidized loans, interest continues to accrue and may be capitalized, increasing your balance.
- Repayment timeline: Deferment may extend your repayment period, though it does not typically count toward forgiveness programs such as Public Service Loan Forgiveness unless you continue making qualifying payments.
- Alternative options: Income-driven repayment plans may reduce your monthly payment to an affordable amount while still counting toward forgiveness, which can be more beneficial than deferment in some cases.
- Communication: Always confirm approval in writing before stopping payments to avoid delinquency or default.
Conclusion
Federal loan deferment eligibility depends on your loan type and your specific circumstances. Whether you are returning to school, facing unemployment, experiencing economic hardship, or serving in the military, a deferment can provide temporary relief from your payment obligations. By understanding the qualifying categories, submitting the proper documentation, and considering the long-term impact on interest and repayment, you can make an informed decision that supports your financial well-being. When in doubt, contact your loan servicer to discuss your options and confirm your eligibility.