Editor's Note: For the latest developments regarding federal student loan debt repayment, check out our student debt guide.
The average student loan borrower with federal loans graduates with $37,338 in debt. If you were to pay that amount on the Standard Repayment Plan at a rate of 5.50%, you’d have to shell out $405 per month for the next 10 years.
But depending on where life takes you after graduation, you may not be able to afford it. There are plenty of circumstances that may make repayment difficult, including going back to school, going into active military duty, and losing a job.
As such, it’s important to know how to pause student loan payments when you can’t afford them. Depending on who your lender is, though, the options can vary.
Repayment of federal student loans was effectively paused from spring 2020 until fall of 2023, but the Debt Ceiling bill required payments to restart in October 2023. However, there are still options available to borrowers who need to pause payment on their student loans.
Two Ways You Can Pause Student Loan Payments
Depending on your situation, you may be able to pause student loan payments through student loan deferment or forbearance. Each of these options has different requirements and outcomes, so it’s essential to understand how they work.
1. Student Loan Deferment
Student loan deferment allows you to reduce or pause your payments for a set period of time. In the meantime, however, the deferred loan will continue to accrue interest, in most cases. For example, if you have an unsubsidized loan or a PLUS loan, you’ll need to make interest-only payments during the deferment, otherwise the interest will capitalize (be added to the loan balance) at the end of the deferment period.
This means that you’ll have a new, higher balance that includes the principal amount at the beginning of the deferment period plus the unpaid interest that accrued during deferment.
The exception is if you have subsidized federal loans or Perkins Loans, in which case you won’t be responsible for paying accrued interest.
2. Student Loan Forbearance
Another option is putting loans in forbearance. Like deferment, forbearance allows qualified applicants to delay payments for a set period of time.
The primary difference is that you’re responsible for paying any interest that accrues during the forbearance period, regardless of which type of loan you have.
Again, it is possible to make interest-only payments during the forbearance period. Under new rules introduced in 2023, though, unpaid interest that accrues during forbearance will not capitalize at the end of the forbearance period.
While these general definitions apply to both federal and private student loans, some details differ between the two.
💡 Quick Tip: Enjoy no hidden fees and special member benefits when you refinance student loans with SoFi.
Federal Student Loans
The U.S. Department of Education offers both deferment and forbearance on all of its student loans. With the exception of the pandemic-era federal forbearance period that came to an end in fall 2023, neither comes automatically. Both deferment and forbearance need to be applied for through your student loan servicer. Here’s what you need to know about both options.
Qualifying for Federal Loan Deferment
If you have federal loans, you may be able to defer your student loan payments for up to three years. Here’s how to know if you may be eligible:
• You have any federal student loan, subsidized or unsubsidized.
• You’re enrolled at least half-time at an eligible school, and you received a Direct PLUS Loan or FFEL PLUS Loan as a graduate or professional student. In this case, your loans will be deferred while you’re in school at least half-time plus six months after you leave.
• You’re a parent who took out a Direct PLUS Loan or FFEL PLUS Loan on behalf of your child student, and they’re enrolled at least half-time at an eligible school. In this case, your loans will be deferred while your child remains in school plus six months after they leave.
• You’re enrolled in an approved graduate fellowship program.
• You’re enrolled in an approved rehabilitation training program for the disabled.
• You’re unemployed and unable to find employment.
• You’re experiencing economic hardship.
• You’re serving in the Peace Corps.
• You’re on active duty military service in connection with a war, military operation or national emergency. In this case, your loans will be deferred while you’re on active duty plus 13 months afterward.
You can read more about deferment eligibility here .
Qualifying for Federal Loan Forbearance
The federal government has two types of forbearance: general and mandatory. Both can last for up to 12 months at a time. But if you still qualify once that period is up, you can request a renewal.
General forbearance is also sometimes called discretionary forbearance because your loan servicer gets to choose whether or not to approve your request.
You can request general forbearance if you’re unable to make your monthly payments due to:
• Financial difficulties
• Medical expenses
• Change in employment
• Other reasons your loan servicer will accept
Mandatory forbearance is not at the discretion of your loan servicer, and can be granted if you meet any of the following requirements:
• You’re serving in a medical or dental internship or residency program and meet specific requirements.
• The total amount you owe on all of your loans is 20% or more of your gross monthly income.
• You’re serving in an AmeriCorps position for which you’ve received a national service award.
• You’re a teacher and qualify for teacher loan forgiveness.
• You qualify for partial payments on your loans through the U.S. Department of Defense Student Loan Repayment Program.
• You’re a member of the National Guard and have been activated by a governor, but don’t qualify for the military deferment.
You can read more details about eligibility requirements for forbearance here .
A Note on the Temporary On-Ramp Period
If you’re currently struggling to manage federal student loan payments, you may be able to take advantage of a temporary repayment on-ramp period without having to rely on deferment or forbearance. This period, which takes place from Oct. 1, 2023 to Sept. 30, 2024, protects financially vulnerable borrowers from the consequences of missing payments. Those who miss payments will not have them reported to the credit bureaus or collections agencies, and loans will not be considered delinquent or in default. However, once this on-ramp period is over, any missed payments will be due.
Private Student Loans
While the options and requirements for these programs are clear on federal student loans, they can be a little trickier with private loans.
That’s because there are so many different private student lenders, and each has its own policy and criteria for determining eligibility.
Unfortunately, there’s no mandatory forbearance option like there is with federal loans. Instead, it’s typically at the lender’s discretion to determine whether you qualify.
Also, the deferment and forbearance periods can vary by lender. For example, you may need to apply every few months, and you may be limited on how often you can apply.
Since there’s no real consistency among private student lenders, if you borrowed a private loan it’s important to check with your lender directly to find out what their policy is.
How Deferment and Forbearance Can Affect You
When you request a deferment or forbearance on your federal loans, it will be noted on your credit report. However, neither option will have a negative impact on your credit score.
That said, if you miss a payment while you’re waiting for your deferment or forbearance request to get approved, it may hurt your credit. At 90 days overdue, your lender can report the missed payment(s) to the credit bureaus.
Because of this, it may be wise to continue making payments as usual until you receive the official approval for your deferment or forbearance with an effective date.
Also, since interest accrued during a deferment can capitalize at the end of the period, you could end up with a higher balance and monthly payment than when you started.
If you originally wanted to pause student loan payments because you couldn’t afford them, a higher payment could make things more difficult. Take interest into account while considering these options.
What If You Don’t Qualify to Pause Student Loan Payments?
Depending on your lender and situation, you may not be eligible for deferment or forbearance. If this happens, there are a couple of options to consider.
Income-Driven Repayment Plans
If you have federal student loans, it may be possible to reduce your monthly payment by enrolling an income-driven repayment plan, such as the newest SAVE plan.
If you qualify, you can decrease your monthly payment to a percentage of your discretionary income. It won’t stop your loan payments altogether, but it can help make them more affordable.
Refinancing Your Student Loans
Whether you have federal or private loans, you can opt to refinance your student loans. Refinancing could help you save money by reducing your monthly payment, either by securing a lower interest rate or lengthening the repayment term. Note that you may pay more interest over the life of the loan if you refinance with an extended term.
You may also be able to switch to a different lender that offers hardship programs or other support if you’re having trouble making payments.
Keep in mind that refinancing federal loans with a private lender will cause you to lose certain benefits, including income-driven repayment options and access to federal loan forgiveness programs.
Determine If Pausing Student Loan Payments Is Right for You
As you’re considering your options and seeing whether you qualify, take a step back and think about whether deferment or forbearance are right for you in the long run.
And if you find that your current lender’s options aren’t enough, consider refinancing your student loans with a lender that provides what you need.
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.
SoFi Student Loan Refinance
If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.
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