Federal Loan Deferment Options
A deferment, like a forbearance, is a temporary suspension of the obligation to repay a federal student or parent education loan. The borrower is not required to make monthly or quarterly payments of principal. During both deferments and forbearances, interest continues to accrue and will be capitalized (added to the loan balance), if unpaid. However, the federal government will pay the interest on subsidized federal student loans, such as the Federal Perkins loan and subsidized Federal Stafford loan, during a deferment. Interest on unsubsidized loans, such as the Federal PLUS loan and unsubsidized Federal Stafford loan, remains the borrower's responsibility.
Types of Student Loan Deferments
There are many types of deferments, each with a different set of eligibility criteria. These deferments are available to Federal Family Education Loans (FFEL) and Direct Loan borrowers who had no outstanding FFEL or Direct Loan balance as of July 1, 1993. (Note that several of these deferments are subject to the HEROES exceptions, which are described later.)
Grace Period Deferment. The obligation to repay a federal education loan is suspended during a grace period after the student graduates or drops below half-time enrollment. The grace period is six months for the Federal Stafford loan and the Federal Parent PLUS loan. There is no grace period for the Federal Grad PLUS loan. The grace period is nine months for the Federal Perkins loan.
The federal government will pay the interest on subsidized federal student loans during the grace period, with a few exceptions noted below.
In some cases, borrowers who have used up their grace period may be eligible for a summer bridge student loan deferment after graduating in the spring if they will be enrolling on at least a half-time basis during the fall. This is effectively a variation on the in-school deferment where borrowers who are enrolled in school on at least a half-time basis do not enter repayment during the summer break.
In-School Deferment. To qualify, federal student loan borrowers must be enrolled on at least a half-time basis in an eligible postsecondary institution. Federal Parent PLUS loan borrowers may qualify if either the borrower or the dependent student on whose behalf the loan was borrowed is enrolled on at least a half-time basis in an eligible postsecondary institution. There is no time limit on the in-school deferment.
Graduate Fellowship Deferment. To qualify, a graduate student must have already received a Bachelor's degree and be pursuing full-time study in a graduate fellowship program, including study outside the United States. Medical school students in an internship or residency do not qualify. There is no time limit on the graduate fellowship deferment.
Disability Rehabilitation Deferment. Individuals with disabilities may qualify for a deferment for the duration of an approved full-time rehabilitation training program. There is no time limit on the disability rehabilitation deferment.
Unemployment Deferment. The unemployment deferment is available to borrowers who are seeking, but unable to find, full-time employment. Full-time employment is defined as involving at least 30 hours of work per week in a job that is expected to last at least three months. There is a three-year limit on the unemployment deferment.
Economic Hardship Deferment. To qualify for this deferment, borrowers must be receiving federal or state public assistance (e.g., TANF, SNAP, SSI, etc.), serving as a volunteer in the Peace Corps, or working full-time but earning less than the federal minimum wage or less than 150% of the poverty line for the borrower's family size. There is a three-year limit on the economic hardship deferment.
Military Service Deferment. Borrowers who are called to active duty service in the U.S. Armed Forces during a war, military operation or national emergency are eligible to have their federal education loans deferred for the duration of their active duty service. Members of the National Guard and Reserves may also qualify for a period of full-time active duty service in the U.S. Armed Forces. The military service deferment includes active duty service encompassing or beginning after October 1, 2007. There is no time limit on the military service deferment. The military service deferment may be requested by the borrower, a family member of the borrower or "another reliable source." Documentation requirements are waived for the first year of the military service deferment. A 180-day post-demobilization military service deferment is also available for each active duty service period.
Post-Active Duty Student Loan Deferment. Borrowers who were enrolled on at least a half-time basis at an eligible postsecondary institution at the time they were called to active duty or within six months prior to the time they were called to active duty are eligible for a post-active duty student deferment. The deferment lasts for up to 13 months or when the borrower re-enrolls in school, whichever occurs first. If a borrower is eligible for both the 180-day post-demobilization military service deferment and the 13-month post-active duty student deferment, these deferments run concurrently.
Eligible borrowers include
- U.S. Armed Forces reservists and retirees ordered to active duty for service in connection with a war, other military operation, or national emergency, regardless of location at which duty is performed
- Any other member of the U.S. Armed Forces on active duty in connection with such emergency (or subsequent actions or conditions) who has been assigned to a duty station location other than one at which the service member is usually assigned
- Members of the National Guard who were called to active duty service by the President or Secretary of Defense during a war, other military operation, or national emergency
- For period of more than 30 consecutive days in connection with a war, other military operation, or national emergency declared by President and supported by federal funds; or
- For purposes of post-active duty student deferment only, on active state duty under which the state Governor activates National Guard personnel based on state statute or policy, and paid using state funds.
Active duty service or National Guard duty for purposes of training or service academy enrollment does not qualify for the post-active duty student deferment.
The Higher Education Relief Opportunities for Students (HEROES) Act of 2003 (P.L. 108-76) established exceptions to the normal rules for the in-school and graduate fellowship deferments. The borrower is treated as qualifying for the in-school and graduate fellowship deferment for up to three years of active-duty service. The federal government will pay the interest on subsidized Federal student loans during this time period. This period of service is also excluded from the grace period and the borrower is entitled to another full six-month grace period upon completion of the excluded period of service. The time necessary for the borrower to resume the graduate fellowship program or resume enrollment in the next regular enrollment period is also excluded if the borrower returns to school.
Affected individuals include
- Members of the U.S. Armed Forces serving on active duty during a war, military operation or national emergency
- Members of the National Guard who were called to active duty service by the President or Secretary of Defense for more than 30 consecutive days during a war, military operation or national emergency
- People who live in or are employed in a disaster area, as declared by a federal, state or local official, in connection with a national emergency
- People who suffer economic hardship as a result of a war, military operation or national emergency
The federal government does not pay the interest on subsidized Federal Stafford loans in a few circumstances.
- The federal government does not pay the interest on subsidized Federal Stafford loans made during the 2012-13 and 2013-14 academic years (July 1 to June 30) during the six-month grace period.
- The federal government does not pay the interest on subsidized loans during Stafford Loan deferment and grace periods for new subsidized Federal Stafford loan borrowers as of July 1, 2013 who take more than 150% of the normal time-frame to complete their degree program.
How to Apply
To apply for a federal student loan deferment, download a deferment request form. Students should complete the appropriate form and return it to their loan servicer (the organization to whom they send payments). Borrowers who are unsure who their loan servicer is can log in to the National Student Loan Data System (NSLDS), to locate all of the necessary contact information for their federal education loans.
If students are currently in school, they can also contact their college's financial aid office to request a deferment while they are enrolled.
For more information on deferments and forbearances for federal student loans, visit StudentAid.ed.gov.
Other Options for Repayment Relief
Federal loan borrowers who are struggling to make monthly payments or simply want to lower their payments, there are options besides deferring their federal education loans, including student loan forbearances and alternate repayment plans.
Previous Deferment Options
Federal education loans made before July 1, 1993 may be eligible for other deferments, such as:
- Domestic Volunteer Deferment (ACTION)
- Full-Time Teacher in a Teacher Shortage Area Deferment
- Internship/Residency Deferment
- National Oceanic and Atmospheric Administration (NOAA) Deferment
- Parental Leave Deferment
- Peace Corps Volunteer Deferment
- Public Health Services Deferment
- Tax-Exempt Volunteer Deferment
- Temporary Total Disability Deferment
- Working Mother Deferment