When it comes time to repay your federal student loans, you have to decide what kind of payment plan you want to be on. All borrowers qualify for the Standard Repayment Plan, which currently ensures you pay off your loan within 10 years. Starting in the summer of 2026, a new Standard Repayment Plan will be introduced and will require fixed payments over 10 to 25 years, depending on your loan amount.
The Standard Plan isn’t the only option available, and it might not be the best choice for your financial needs. By learning more about the Standard Repayment Plan, you can decide if it’s the right choice for you or you want to go a different route.
What Is the Standard Repayment Plan for Student Loans?
Upon graduation from college or if you drop below half-time enrollment, you have a six-month grace period for the Direct Loan program (nine months for a federal Perkins Loan) when you don’t have to make payments.
Once that ends, you’ll begin the Standard Repayment Plan, the default for all federal student loan borrowers once they have left school. That’s unless you choose a different plan. Let’s start by looking at the standard plan, which currently sets your monthly payments at a certain amount so that you will have your loans paid off within 10 years.
With the Standard Repayment Plan, borrowers currently pay fixed monthly payments for 10 years. Because the plan offers a relatively short repayment period and monthly payments don’t change, you will save more money in interest than longer repayment plans.
For example, if you just graduated with the average federal student loan debt of $39,075 at 6.39% interest, you’ll pay $13,905.58 in total interest. Expanding to 25 years at the same rate will lower your monthly payment by almost half, but you’ll end up paying $39,272.31 in total interest.
There’s a variation on the 10-year plan: the graduated repayment plan. Under this plan, repayments start low, and every two years, your payments increase. This is a good option for recent graduates who may have lower starting salaries but expect to see their pay increase substantially over 10 years.
Note that the Standard Repayment Plan will change for loans taken out on or after July 1, 2026. The refashioned plan will still have fixed payments, but the repayment term will be based on the loan amount, from 10 years for less than $25,000 to 25 years for more than $100,000.
What may make the Standard Repayment Plan less appealing to some borrowers is that payments will likely be higher than on any other federal repayment plan because of the short loan term.
For people with a large amount of student debt or high interest rates, the monthly payments can be daunting or unmanageable. You might face sticker shock when you receive your first bill after your grace period, so don’t let it come as a surprise.
To determine if the Standard Repayment Plan is a good option for you, you can use the federal Loan Simulator to calculate student loan payments. Or contact your loan servicer before your first payment is due to see how much you will owe each month.
Changing Your Repayment Schedule
If you want to change your repayment schedule or plan, call your loan servicer and see what they can do.
You’ll need to contact each loan servicer if you took out more than one loan and want to change repayment schedules. You can change your federal student loan repayment plan at any time, free of charge.
What Are the Pros and Cons of the Standard Repayment Plan?
There are upsides and downsides to weigh when considering the Standard Repayment Plan.
Pros
You will pay off your loans in less time than you would with other types of federal repayment plans, which may allow you to set aside money for things like purchasing a home.
You’ll save money on interest, since you’re paying your loan back faster than you would on other federal plans.
The plan offers predictability. Payments are the same amount every month.
You don’t need to recertify your loan every year to prove your eligibility.
Cons
Your monthly payments will probably be higher than payments made under other student loan repayment plans with extended repayment periods.
Your monthly payments are based on the number of years it will take you to repay the loan, not on how much you can afford, as with income-driven repayment plans.
With the Income-Based Repayment plan, your remaining balance will be forgiven after you make a certain number of eligible payments over 20 to 25 years.
The Takeaway
The federal Standard Repayment Plan of 10 years could be right for you if you’re able to keep up with payments and you want to pay off your debt quickly. (Be aware that the Standard Plan will be changing for loans taken out on or after July 1, 2026.)
Another option is to refinance your student loans to improve your interest rate and possibly change your loan term. Just realize that refinancing federal student loans into a private student loan means giving up federal benefits like income-driven repayment and loan forgiveness. Refinancing with an extended term could also increase your total interest charges.
If refinancing makes sense for you, it could save you money over the life of your loans and potentially allow you to pay your debt back faster.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.
About the author
Kylie Ora Lobell
Kylie Ora Lobell is a personal finance writer who covers topics such as credit cards, loans, investing, and budgeting. She has worked for major brands such as Mastercard and Visa, and her work has been featured by MoneyGeek, Slickdeals, TaxAct, and LegalZoom. Read full bio.
SoFi Student Loan Refinance Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).
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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
If you’re struggling to keep up with student loan payments, rest assured you are not alone.
There are many reasons why you may be having difficulty with your loans. Some students may struggle to find a job after graduation or some may not earn as much as they anticipated right out of the gate. For those with federal student loans, forbearance and deferment options exist for these very reasons. Here’s a closer look at the details, along with the changes to deferment and forbearance that will take effect for loans issued after July 1, 2027.
When monthly student loan payments become insurmountable, the worst thing to do is nothing at all. When a borrower stops paying their student loans, they may go into default. This has the potential to devastate an individual’s credit score.
In default, borrowers could also face relentless collection agencies or could even have their wages garnished. Plus, in most cases, student loans can’t be discharged even if the borrower files for bankruptcy.
Borrowers with federal student loans may have other options for pausing or temporarily reducing their monthly payments if they’ve found themselves in a tough financial spot. Namely, borrowers can apply for either student loan deferment or forbearance from the federal government in order to avoid default.
It can be tough to figure out the difference between these two programs and which is best for your situation. Here’s a breakdown of the differences between student loan deferment and forbearance.
💡 Quick Tip: Ready to refinance your student loan? With SoFi’s no-fee loans, you could save thousands by lowering your interest rate. Note that you may pay more in interest if you refinance with an extended term. Refinancing federal loans also means losing access to federal repayment plans and other programs.
What Is the Difference Between Deferment and Forbearance?
Let’s start with the similarities: Both deferment and forbearance allow a borrower to temporarily lower or stop making payments on their federal student loans for a defined period of time, if they qualify. In both cases, the borrower needs to contact their loan servicer, submit a request, and provide the documentation requested by the loan servicer.
The main difference between the two is that, while in deferment, borrowers are not required to pay the interest that accrues if they have a qualifying loan.
Specifically, interest is not owed on Direct Subsidized Loans, Subsidized Federal Stafford Loans, Federal Perkins Loans, and subsidized portions of Direct Consolidation Loans or Federal Family Education Loan Program (FFEL) Consolidation Loans.
Interest payments are still required on Direct Unsubsidized Loans, Unsubsidized Federal Stafford Loans, Direct PLUS Loans, FFEL Plus Loans, and unsubsidized portions of Direct Consolidation Loans and FFEL Consolidation Loans.
With federal student loan forbearance, borrowers are always responsible for paying the interest that accrues, regardless of what kinds of federal loans they have.
You can either pay the interest as it adds up during the forbearance period, or you can have it added to your balance at the end.
Who Is Eligible for Deferment?
Deferment is tailored to people who are facing financial difficulties. Loans can be deferred for up to three years.
To qualify, you need to be enrolled in school at least half-time, in the military, in another eligible post-graduate role, or unable to find a full-time job. You may also qualify for a deferment if you’re seeking cancer treatments, are enrolled in an approved rehabilitation program, or are serving in the Peace Corps.
If a borrower is enrolled in an approved graduate program, they may be able to defer their loans for an additional six months after school ends.
However, deferment options will be limited for future borrowers. Due to the recent U.S. domestic spending bill, deferment for economic hardship and unemployment will no longer be available for federal student loans issued after July 1, 2027.
The two types of forbearance are mandatory and general. Mandatory forbearance must be granted if you qualify, while general forbearance is up to your loan servicer to approve you or not.
Mandatory Forbearance
Loan servicers are required to grant mandatory forbearance to qualifying borrowers. Depending on the type of federal student loan, borrowers may be eligible if they are in a medical or dental internship or residency, serving in AmeriCorps or the National Guard, or working as a teacher and performing a teaching service that qualifies for teacher loan forgiveness.
Borrowers may also qualify if their monthly student loan payment is at least 20% of their gross monthly income. Again, this will depend on the type of loan they have. Note: Mandatory forbearance is granted for up to a year at a time. If you’re still facing financial challenges when the forbearance period ends, you can request another, up to a cumulative total of three years.
For loans issued after July 1, 2027, forbearance will be capped at nine months in any 24-month period.
General Forbearance
With general forbearance, it’s up to the loan servicer to decide whether to grant it, and only certain federal student loans are eligible (Direct Loans, FFEL, and Perkins Loans). Like mandatory forbearance, general forbearance can only be granted for 12 months at a time. There is a three-year cumulative limit on general forbearances. As mentioned above, loans issued after July 1, 2027 will have a different limit: no more than nine months of forbearance in a 24-month period.
Borrowers can apply for a general forbearance if they’re unable to make loan payments because of financial hardship, medical bills, or changes in their job (such as reduced pay or unemployment). If there are other reasons they’re unable to pay, it’s also possible to make that case to the loan servicer, but the decision will be theirs to make.
Forbearance vs. Deferment for Student Loans: Which Option to Choose?
If your federal student loan type and circumstances allow you to, it’s best to apply for deferment since it allows you to get a break on interest during the deferment period. However, if you’ve already exhausted the maximum time for a deferment or your situation doesn’t fit the narrow eligibility criteria, then it could make sense to apply for a forbearance.
If your ability to afford your loan payments is unlikely to change anytime soon, or if you have private loans and/or federal loans that don’t qualify for a deferment or forbearance program, you may want to consider other solutions, such as an income-driven repayment plan or student loan refinancing.
How Does an Income-Driven Repayment Plan Work?
Another way to potentially reduce your federal student loan payment is to apply for an income-driven repayment plan. The government offers three different income-driven plans, which cap the borrower’s monthly payments at a percentage of their discretionary income.
The plan a borrower qualifies for depends on the type of loan they have and when it was borrowed. Depending on the plan, your monthly payment will generally be reduced to 10-20% of your discretionary income. The repayment term is also extended up to 25 years.
If you still have a balance once the repayment period is up on the Income-Based Repayment plan (IBR), the remaining debt is forgiven. You may get credit for your payments on PAYE and ICR if you switch to IBR. However, you may have to pay taxes on the canceled debt.
Starting in the summer of 2026, borrowers will have a new income-driven option, the Repayment Assistance Plan (RAP). This will be the only income-driven plan available to those who take out loans after July 1, 2026. The PAYE and ICR programs will also be eliminated in the coming years.
How Can Student Loan Refinancing Help?
For some borrowers, refinancing student loans can be an option that helps them reduce their monthly payment or lower their interest rate. (Note: You may pay more interest over the life of the loan if you refinance with an extended term.) Refinancing involves taking out a new loan from a private lender and using it to pay off existing federal or private loans, effectively combining multiple loans into one.
The new loan will have a new term and interest rate, which has the potential to help borrowers save on interest or the amount they pay over the life of the loan. Borrowers with a solid credit score and employment history (among other positive financial indicators) are especially likely to be able to qualify for favorable terms.
Keep in mind that if you refinance federal loans, you will no longer qualify for the federal benefits we discussed in this post, including deferment, forbearance, or income-driven repayment programs. Make sure to weigh the pros and cons of refinancing carefully before moving forward.
However, some private lenders do offer temporary relief if you experience financial hardship. Rather than stopgaps that can require you to reapply year after year, refinancing can help you gain a long-term plan for getting your payments under control.
With SoFi, it’s possible to refinance loans without paying any hidden fees or penalties at either a fixed or variable interest rate.
The Takeaway
Deferment and forbearance are both options that allow borrowers to temporarily pause payments on their federal student loans.
Deferment differs from forbearance in that some borrowers may not be required to pay interest that accrues during deferment, depending on the type of loan they have. With forbearance, borrowers are generally required to cover interest that accrues while the loan is in forbearance.
Borrowers who anticipate having trouble making monthly federal student loan payments in the long-term might consider applying for income-driven repayment, which ties monthly payments to the borrower’s income level.
If you’re comfortable sacrificing federal programs and repayment plans, refinancing your student loans with a private lender could also lead to savings. Refinancing with an extended term, though, could increase your long-term interest costs.
With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.
SoFi Student Loan Refinance Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
If you dread your student loan payments each month because you aren’t sure whether you can afford to cover the minimum payment, know that there are solutions to make student loans more manageable. One option is hiring a student loan consultant to help create a customized repayment plan. A student loan consultant may also assist you in navigating the upcoming student loan changes due to take effect in July 2026 as a result of the U.S. domestic policy bill.
While some borrowers might find their advice valuable, either might find it’s not worth the expense – especially if they’re already struggling to find a way to make their loan payments. Here’s what you should keep in mind if you’re thinking of working with a student loan consultant.
• Student loan consultants offer personalized help like explaining jargon, contacting servicers, and recommending repayment strategies — but their services can cost $40 to $600+.
• Much of what they offer is free elsewhere, including enrolling in income-driven repayment (IDR) plans, consolidating federal loans, or getting help from the Federal Student Aid Ombudsman.
• Nonprofit credit counseling agencies (like those through the National Foundation for Credit Counseling) can provide unbiased, often low-cost support.
• Consultants may be helpful if you’re overwhelmed, don’t have time to research options, or struggle with lender communication — but may be redundant if you’re financially savvy.
• Avoid scams by confirming services aren’t free elsewhere and checking credentials — and never pay upfront for federal loan assistance.
What Is a Student Loan Consultant?
Americans owe more than $1.8 trillion in collective student loans. As student loan debt has increased, student loan consultants have emerged to help students navigate the loan process. Most student loan consultants work independently from colleges or universities, and are not affiliated with specific repayment programs. Student loan consultants work one-on-one with borrowers to identify their repayment needs and try to set them up on a path of debt payoff success.
What Consultants Can Help With
There are five main ways a student loan consultant can help you:
• Recommending a student loan repayment strategy
• Offering personalized guidance specific to your finances
• Explaining student loan jargon
• Researching your loan details
• Communicating with lenders on your behalf
Before seeking out a student loan consultant, it might be helpful to identify your specific needs. If you don’t understand the difference between consolidation and refinancing, for example, then talking with a consultant about student loan jargon could be helpful.
If calling lenders sends you into a panic, maybe that’s where you want the consultant’s help. And if you’re struggling to make your minimum monthly payments, you could potentially talk to a consultant about finding a better student loan repayment plan.
The cost of a student loan consultant can vary widely, and can come in the form of an hourly fee, flat rate, or annual fee. You could expect to pay anywhere from as little $40 to upwards of $600 or more for help from a student loan counselor. Making sure their services are worth the money you are paying is important, of course, and that can be done by confirming that their services aren’t something you could do on your own — like finding a federal income-driven repayment plan (which we’ll get into below). It’s also important to ensure that the cost doesn’t prevent you from making your student loan payments.
Before speaking with a consultant, finding out what is possible and what sounds too good to be true can help you weed out any scammy student loan consultants. And when you’re trying to understand what you can do on your own (without a consultant’s help), a good place to start is the Consumer Financial Protection Bureau .
Programs That Are Available for Free
A fair number of programs to help with student loan payments are available to everyone, without a fee. For example, before seeking out a student loan consultant, you could look into enrolling in a federal income-driven repayment (IDR) plan.
Typically, when you graduate from college or reduce your attendance to under half-time, you’re automatically put on the 10-year Standard Repayment Plan. However, borrowers looking to reduce the monthly payments on their federal student loans may qualify for an IDR plan, which reduces your monthly payment to a percentage of your discretionary income and extends the repayment term up to 25 years (the exact details depend on the specific plan you choose). After the repayment period is up, any remaining balance is forgiven (but may be subject to taxes). The Income-Based Repayment (IBR) plan can also lead to forgiveness at the end of your repayment period (but that forgiveness may be subject to taxes).
Starting in the summer of 2026, there will be a new income-driven plan called the Repayment Assistance Plan (RAP). RAP will be the only income-driven repayment option for those who borrow after July 1, 2026.
Because these repayment plans extend your loan term, you may pay more interest over the life of your loan. Even so, it could bring much-needed immediate relief and result in some loan forgiveness.
💡 Quick Tip: When refinancing a student loan, you may shorten or extend the loan term. Shortening your loan term may result in higher monthly payments but significantly less total interest paid. A longer loan term typically results in lower monthly payments but more total interest paid.
Neutral Parties You Can Ask for Help
If you have a conflict regarding one of your federal student loans, you can ask for help from the Federal Student Aid Ombudsman Group , which serves as a neutral party. They can resolve discrepancies with loan balances and payments, and help identify loan repayment options. You can also try to resolve the dispute before contacting the Ombudsman Group. Or you can file a complaint through the Consumer Financial Protection Bureau.
Consider a Nonprofit Credit-Counseling Agency
The National Foundation for Credit Counseling can help you find a qualified credit counseling agency, which can aid you in creating a budget and even negotiating a new payment plan with creditors. The U.S. Department of Justice also offers an online database of credit-counseling agencies .
Make Sure the Consultant Isn’t Providing a Redundant Service
It’s important to make sure the consultant’s service isn’t something you could do on your own. For example, you could lower your monthly payment on your federal student loans by opting for an income-driven repayment plan without paying a consultant for their services.
You can also consider consolidating your federal loans through a Direct Consolidation Loan, which is also free. A Direct Consolidation Loan allows you to combine all of your federal loans into one, and gives you a new interest rate that’s a weighted average of your current interest rates, rounded up to the nearest eighth of a percent. While you won’t have a lower overall interest rate, you could lower your monthly payments and simplify the repayment process.
Refinancing Your Student Loans
If you’re looking for alternative ways to pay off your student loan debt, you could also consider student loan refinancing. When you refinance your student loans, you take out a new loan with a private lender and then use the proceeds to pay off one or more existing student loans. Ideally, the refinanced loan has a better interest rate and terms.
Extending your loan term through refinancing can lower your monthly payments. But it does mean paying more in interest over the life of the loan.
Alternatively, refinancing to a lower interest rate and shorter loan term could cost you less in interest over the life of the loan and help you pay it off faster. Keep in mind, however, that refinancing with a private lender means you’ll no longer be able to access federal loan benefits like income-driven repayment plans.
With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.
SoFi Student Loan Refinance Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Federal student loans never expire. Unlike private student loans, federal loans have no statute of limitations, which is the time limit creditors have to use legal means to collect on a debt. And while the clock technically can run out on private student loans, that doesn’t mean your student loans have vanished — lenders simply can no longer sue you to collect the debt. Plus, waiting it out will wreak havoc on your finances, anyway.
As such, waiting for student loans to expire is not a recommended tactic to manage student loans. Read on to learn more about why your student loans aren’t likely to expire and more effective ways to deal with student loan debt.
The answer to that question is “never” when it comes to federal loans. There’s no statute of limitations for collections on federal student loans. This means that if you stop making payments, your loan servicer or a debt collector can sue you to force repayment, regardless of how long it’s been since you last made a payment.
So what happens if you do stop paying your federal student loans altogether? First, your total balance will continue to increase. Whether or not you’re making any payments, interest will accrue, which means that every month your lender will add your new interest fees to your principal loan balance.
After at least 270 days of non-payment, your federal student loan will be in default. This can cause a number of things to happen, including loan acceleration (meaning your entire balance becomes due) and your loan getting sent to collections, which can damage your credit score and lead to additional fees from a collection agency.
Additionally, the federal government may decide to withhold your tax refund or even garnish wages directly from your paycheck. Your loan holder can also sue you to force you to pay up.
Unlike federal student loans, private student loans may be bound by a statute of limitations on collections. The statute of limitations varies by state and is generally between three and 10 years from the date you stopped paying your loans. Once the statute of limitations is up, the debt becomes “time-barred.”
Before you stop making your monthly payments, it’s important to know that a statute of limitations is not the same thing as an expiration date on your loans. A statute of limitations is merely a limit on the time that a lender or debt collector has to sue you in court to force you to pay back the loans.
Even if your debt is time-barred, you still technically owe the money, and failure to pay could lead to student loan default. When you default, you may face negative impacts to your credit score, and you may still end up dealing with collection agencies, plus any additional fees they may charge.
To potentially get your student loans (federal or private) discharged in bankruptcy, you would have to prove that paying your loans would cause you “undue hardship” (to borrow a phrase right from the U.S. Bankruptcy Code). Proving that paying your loans would cause undue hardship typically involves passing the Brunner test. This is a tool bankruptcy courts use that basically lays out ways in which you might claim undue hardship.
In short, it’s far from a sure thing. But whether you’re 19 or 90 years old, your federal student loans will not just automatically expire after a period of non-payment — and failing to pay has some serious consequences.
Alternative Options to Manage Student Loan Debt
Just because federal student loans don’t expire doesn’t mean there aren’t other ways to manage your student loan debt. Here are a few other options you might explore.
Public Service Loan Forgiveness
Public Service Loan Forgiveness (PSLF) is available to professionals who work for qualifying employers in certain fields such as government, the nonprofit sector, and healthcare. This program is meant to encourage graduates to fill needed jobs in the public service sector without worrying about making enough money to pay off their student debt.
PSLF requires that you make 120 payments (the equivalent of 10 years, though they don’t need to be consecutive) while working full-time for a qualifying employer. Only payments made under certain repayment programs (such as income-driven repayment) count toward forgiveness. Still, federal loan forgiveness may be a good option for public servants with lots of debt left to pay.
Income-Driven Repayment
Income-driven repayment (IDR) plans reduce your payments to a percentage of your discretionary income. There are three IDR plans available today:
• Saving on a Valuable Education (SAVE), which replaced REPAYE
• Pay As You Earn (PAYE)
• Income-Based Repayment (IBR)
• Income-Contingent Repayment (ICR)
In addition to reducing payments, these plans also extend the repayment term up to 25 years. Once the repayment period is up on the Income-Based Repayment plan, any remaining debt should be forgiven (but may be considered taxable income). The Department of Education is no longer offering forgiveness at the end of PAYE or ICR, but you can get credit for your payments by switching to IBR.
Starting in the summer of 2026, there will be a new income-driven option called the Repayment Assistance Plan (RAP). This plan offers forgiveness at the end, but only after you’ve paid your loans for 30 years.
Student Loan Refinancing
Another option to save money on your student loans is student loan refinancing. Loan refinancing doesn’t change the underlying amount that you owe. However, it may reduce the amount of money you spend on interest and help you secure better payment terms, which can add up to some serious cash over the life of your loan. When you refinance a federal student loan, you replace it with a private student loan.
Refinancing your federal and private loans based on your current credit score and income may allow you to score a brand new loan with a better interest rate or a shorter payoff term. However, you may pay more interest over the life of the loan if you refinance with an extended term.
To see how refinancing your loans could potentially help you spend less money in interest, you can take a look at this student loan refinance calculator. Just know that if you’re working toward PSLF, refinancing with a private lender will disqualify your loans from this and any other federal program or repayment plan.
💡 Quick Tip: Refinancing comes with a lot of specific terms. If you want a quick refresher, the Student Loan Refinancing Glossary can help you understand the essentials.
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The Takeaway
If you’ve been waiting around for your federal student loans to expire, you’re out of luck — federal student loans don’t expire. While private student loans may expire due to their statute of limitations, your debt won’t just disappear when this happens. Your finances will also suffer in the meantime. This is why it’s important to look into other ways to manage your student loan debt, such as student loan refinancing or income-driven repayment.
Remember that refinancing federal student loans means forfeiting access to federal repayment plans and other forgiveness programs. If you’re not relying on federal benefits, however, it could be an effective way to reduce your interest rate.
With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.
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Federal loans allow you to stop or reduce your payments in some circumstances, such as by enrolling in grad school, for up to three years — which is known as deferment. Deferment on private student loans varies by lender, and not all lenders offer it.
One thing you generally don’t want to do is simply stop making payments on your student loan. Whether your loans are federal or private, this puts you at risk of default, which can have a number of negative consequences.
Read on to learn more about student loan deferment, including what it is, how it works, its pros and cons, plus some alternative ways to get student debt relief.
• Student loan deferment allows borrowers to temporarily pause or reduce payments for up to three years.
• Interest does not accrue on subsidized federal loans during deferment but does on unsubsidized loans.
• Eligibility includes financial hardship, unemployment, military service, in-school enrollment, or medical treatment.
• Deferment can provide financial relief but may increase total loan costs due to accruing interest.
• Alternatives include income-driven repayment plans, forbearance, or refinancing, depending on financial goals.
What Is Student Loan Deferment?
Student loan deferment allows qualified applicants to reduce or stop making payments on their loans for up to three years. If you have a subsidized federal loan, no interest accrues during the deferment period. If you have an unsubsidized federal loan, interest will accrue and will be added to the loan amount (or capitalized) at the end of the deferment period.
Deferments are available on federal loans including Direct Loans, FFEL Program loans, and Perkins Loans.
Private student loans may or may not offer deferment options to borrowers. If you have questions about your private student loan, you’ll want to check in with your lender directly.
How Does Student Loan Deferment Work?
If you have a federal student loan and are no longer in school at least half-time, you will need to apply to defer payments on your student loan. This usually involves submitting a request to your student loan servicer. You will also likely need to provide documentation to show that you meet the eligibility requirements for the deferment (more on eligibility requirements below).
If you have an unsubsidized federal student loan and are granted deferment, interest will continue to accrue during the deferral period. You will have the option to either pay the interest as it accrues or allow it to accrue and be capitalized (added to your loan principal balance) at the end of the deferment period.
Deferments are available on federal loans including Direct Loans, FFEL Program loans, and Perkins Loans.
If a private lender offers deferment, they will likely have their own forms and requirements.
Why Defer Student Loans
Applying for deferment may make sense if you are facing short-term difficulty paying your student loans, since a deferment can provide you with the opportunity you need to stay afloat financially. And, if you have a subsidized loan, deferment won’t make your loan any more expensive in the long run.
If you’re able to stay on top of your loan payments, then deferment likely doesn’t make sense. If you think that you may have long-term difficulty making your monthly loan payments, deferment may not be the best option, either.
If you have an unsubsidized federal loan, interest will continue to accrue during deferment. At the end of the deferment period, this interest will be capitalized on the existing loan amount (or the principal loan value). Moving forward, interest will be calculated based on this new total. So essentially, you are accruing interest on top of interest, which can significantly increase the amount of interest owed over the life of the loan.
Pros and Cons of Student Loan Deferment
Student loan deferment can help borrowers who are struggling financially, but it may not be the right choice for everyone. Here are some pros and cons to consider when evaluating deferment options for federal student loans.
Pros
Cons
Borrowers are able to temporarily suspend or lower the monthly payments on their student loans.
On most federal student loans, interest continues to accrue. This may significantly increase the total cost of borrowing over the life of the loan.
Borrowers may qualify for deferment for periods of up to three years.
Because interest may continue to accrue during deferment, other options — like income-driven repayment plans — may be more cost-effective in the long term.
Types of Student Loan Deferment
For federal student loans, there are a few different deferment options. Here are the details on some of the most common reasons borrowers apply for deferment.
In-School Deferment
Students who are enrolled at least half-time in an eligible college or career program may qualify for an in-school deferment. If you are enrolled in a qualifying program at an eligible school, this type of deferment is generally automatic. If you find the automatic in-school deferment doesn’t kick in when you are enrolled at least half-time in an eligible school, you can file an in-school deferment request form.
Unemployment Deferment
Those currently receiving unemployment benefits, or who are actively seeking and unable to find full-time work, may be able to qualify for unemployment deferment. Borrowers can receive this deferment for up to three years.
Note that under the new ‘Big, Beautiful Bill,” loans made after July 1, 2027 are no longer eligible for deferments based on unemployment hardship.
Economic Hardship Deferment
This type of deferment may be an option for borrowers who are receiving merit-tested benefits like welfare, who work full-time but earn less than 150% of the poverty guidelines for your state of residence and family size, or who are serving in the Peace Corps. Economic hardship deferments may be awarded for a period of up to three years.
Note that under the ‘Big, Beautiful Bill,’ loans made after July 1, 2027 are no longer eligible for deferments based on economic hardship.
Military Deferment
Members of the U.S. military who are serving active duty may qualify for a military service deferment. After a period of active duty service, there is a grace period in which borrowers may also qualify for federal student loan deferment.
Cancer Treatment Deferment
Individuals who are undergoing treatment for cancer may qualify for deferment. There is also a grace period of six months following the end of treatment.
Other Types of Deferment
There are other situations and circumstances in which borrowers might be able to apply for deferment. Some of these include starting a graduate fellowship program, entering a rehabilitation program, or being a parent borrower with a Parent PLUS Loan whose child is enrolled in school at least half-time.
Consequences of Defaulting on Federal Student Loans
If you simply stop making payments as outlined in your loan’s contract, you risk defaulting on your student loan. Default timelines vary for different types of student loans.
Most federal student loans enter default when payments are roughly nine months, or 270 days, past due. Federal Perkins Loans can default immediately if you don’t make any scheduled payment by its due date.
Consequences of defaulting on federal student loans includes:
• Immediately owing the entire balance of the loan
• Losing eligibility for forbearance, deferment, or federal repayment plans
• Losing eligibility for federal student aid
• Damage to your credit score, inhibiting your ability to qualify for a car or home loan or credit cards in the future
• Withholding of federal benefits and tax refunds
• Garnishing of wages
• The loan holder taking you to court
• Inability to sell or purchase assets such as real estate
• Withholding of your academic transcript until loans are repaid
Consequences of Defaulting on Private Student Loans
The consequences for defaulting on private student loans will vary by lender but could include repercussions similar to federal student loans, and more, including:
• Calls, letters, and notifications from debt collectors
• Additional collection charges on the balance of the loan
• Legal action from the lender, such as suing the borrower or their cosigner
To avoid these negative consequences, it’s best to contact your lender as soon as you think you may miss a payment. Your lender may be more willing to work with you prior to your loan entering default.
• Enrolled in an approved rehabilitation program for the disabled
Borrowers who re-enroll in college or career school part-time may find that their federal student loans automatically go into in-school deferment with a notification from their student loan provider.
Loans may also keep accruing interest during deferment — depending on what types of federal student loans the borrower holds. Borrowers are still responsible for paying interest if they have a:
• Direct Unsubsidized (Stafford) Loan
• Direct PLUS Loan
If you don’t pay the interest during the deferment period, the accrued amount is added to your loan principal, which increases what you owe in the end.
Private lenders aren’t required to offer deferment options, but some do. For example, some might allow you to temporarily stop making payments if you:
• Lose your job
• Experience financial hardship
• Go back to school
• Have been accepted into an internship, clerkship, fellowship, or residency program
• Face high medical expenses
Typically, even while a private student loan is in deferment, the balance will still accrue interest. This means that in the long term, the borrower will pay a larger balance overall, even after the respite of deferment.
In most cases, even with accrual of interest, deferment is preferable to defaulting. Borrowers with private loans could contact the lender to ask what options are available.
The Limits of Student Loan Deferment
Keep in mind that deferment is not a panacea. By definition, it’s temporary. Federal student loan borrowers will ultimately need to go back to making payments once they are no longer deferment-eligible. For example, a borrower’s deferral might end if they leave school, even if their ability to pay has not improved.
Federal loans can only be deferred for up to three years. With private loans, there may not be an option to defer at all, and if it is an option, the limit may be no more than a year.
Other Options for Reducing Federal Student Loan Payments
Besides student loan deferment, you have other choices if you can’t afford the total cost of your monthly payments. Here’s a look at some alternatives to deferment.
If you qualify, you may be able to reduce your monthly payment based on your income. Enrolling in an income-driven repayment plan won’t have a negative impact on your credit score or history. On certain income-driven repayment plans, student loan balances can be forgiven after 20 or 25 years, depending on the payment plan that the borrower is eligible for.
Starting on July 1, 2026, income-driven repayment plans PAYE, ICR, and SAVE will be replaced by a new Repayment Assistance Plan (RAP). The existing IDR plans will be eliminated by July 1, 2028. With RAP, payments range from 1% to 10% of adjusted gross income with terms up to 30 years. After the term is up, any remaining debt will be forgiven.
Forbearance
Student loan forbearance is another way to suspend or lower your student loan payments temporarily during times of financial stress, typically for up to nine months in a 24-month period under the new Repayment Assistance Plan. Generally, forbearance is not as desirable as deferment, since you will be responsible for accrued interest when the forbearance period is over no matter what type of federal loan you have.
When comparing deferment vs. forbearance, you’ll want to keep in mind that there are two types of forbearance for federal student loan holders: general and mandatory.
General student loan forbearance is sometimes called discretionary forbearance. That means the servicer decides whether or not to grant your request. People can apply for general forbearance if they’re experiencing:
• Financial problems
• Medical expenses
• Employment changes
General forbearance is only available for certain student loan programs, and is only granted for up to nine months at a time. At that point, you are able to reapply for forbearance if you’re still experiencing difficulty. General forbearance is available for:
• Direct Loans
• Federal Family Education Loan (FFEL) Program loans
• Perkins Loans
Mandatory forbearance means your servicer is required to grant it under certain circumstances. Reasons for mandatory forbearance include:
• Serving in a medical residency or dental internship
• The total you owe each month on your student loan is 20% or more of your gross income
• You’re working in a position for AmeriCorps
• You’re a teacher that qualifies for teacher student loan forgiveness
• You’re a National Guard member but don’t qualify for deferment
Similar to general forbearance, mandatory forbearance is granted for up to nine month periods, and you can reapply after that time.
Another Option to Consider: Refinancing
Depending on your personal financial circumstances, another long-term solution could be student loan refinancing. This involves applying for a new loan with a private lender and using it to pay off your current student loans. Qualifying borrowers may be able to secure a lower interest rate or the option to lengthen their loan’s term and reduce monthly payments. Note that lengthening the repayment period may lower monthly payments, but will generally result in paying more interest over the life of the loan.
Refinancing could be a good option for borrowers with strong credit and a solid income, among other factors. Unlike an income-driven repayment plan, your monthly payment wouldn’t change based on your income.
Either way, you’ll want to keep in mind that refinancing federal student loans with a private lender means you no longer have access to any federal borrower protections or payment plans. So, if you are taking advantage of things like income-driven payment plans or deferment, you likely don’t want to refinance. But for other borrowers, student loan refinancing might be a useful solution.
If you have more than one student loan, refinancing could also simplify your repayment process.
If you take out a federal student loan and at some point need to pause or reduce your payments, you may be able to qualify for deferment, forbearance, or an income-driven repayment plan. Each option has its pros and cons.
If you’re considering a private student loan (or refinancing your federal loans), keep in mind that private loans don’t come with government-sponsored protections like forbearance and deferment. However, private lenders may offer hardship and deferment programs of their own.
If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.
Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.
FAQ
How long can you defer student loans for?
Depending on the type of deferment you are enrolled in, federal loans can be deferred for up to three years. Private student loans may not offer an option to defer payments, and if they do, the limit will be set by the individual lender.
Why would you defer student loans?
Deferment can be helpful if you are facing a temporary financial hurdle because they allow you to pause or reduce your payments for a period of time.
Are there any reasons not to defer student loans?
Most loans will continue to accrue interest during periods of deferment. When the deferment is over, this accrued interest is then capitalized on the loan. This means it’s added to the existing value of the loan. Moving forward, interest is charged based on this new total. This can significantly impact the total amount of interest that a borrower has to pay over the life of a loan.
SoFi Private Student Loans Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).
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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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