Deferment and Forbearance on Federal Student Loans: What Actually Pauses

Deferment vs Forbearance: The Core Difference

Deferment postpones your payments for a defined, qualifying reason, such as returning to school at least half-time, active military service, or an approved economic hardship period. Forbearance also pauses or reduces your payments, but it covers a wider set of situations and is granted at your servicer's discretion when you don't meet the requirements for a specific deferment. Both stop your account from going delinquent while payments are paused, and both require you to apply through your loan servicer rather than happening automatically.

What Happens to Interest

The difference that matters most to your balance is interest. Subsidized federal loans and Perkins Loans do not accrue interest during most deferment periods, the government covers it as it did while you were in school. Unsubsidized loans and PLUS loans accrue interest during deferment regardless of the reason. Forbearance treats every loan type the same way: interest keeps accruing no matter what kind of loan you hold, and unpaid interest capitalizes onto your balance once the forbearance ends.

Because forbearance always accrues interest, request a deferment first whenever you qualify for one, and treat forbearance as the fallback option when nothing else fits your situation.

What Changes for Loans Issued After July 1, 2027

Under the 2025 federal loan overhaul, new federal student loans disbursed on or after July 1, 2027 will no longer qualify for economic hardship or unemployment deferment, according to university financial aid reporting on the changes . Forbearance on those new loans will also be capped at a maximum of 9 months within any rolling 24-month period, down from the current practice of up to 12 months at a time. Loans you already hold, or borrow before that July 2027 cutoff, keep access to the current deferment categories and the longer forbearance window, so the tighter rules apply going forward to new borrowing, not retroactively.

How to Apply

Request either option directly through your loan servicer's website or by submitting the relevant form from studentaid.gov. Federal deferment and forbearance are not automatic, even when your situation clearly qualifies, your loan keeps accruing interest and can slide toward delinquency until your servicer processes an approved request. Keep making payments while your request is under review unless your servicer confirms the pause is already in effect, a pending application does not protect your account by itself.

Mandatory vs Discretionary Forbearance

Some forbearance categories are mandatory, meaning your servicer must grant the pause once you document that you qualify, such as enrollment in a medical or dental internship or a National Guard duty assignment. Other forbearance is discretionary, meaning your servicer decides case by case whether to grant it, often used when a borrower does not meet a specific deferment or mandatory forbearance category but faces a temporary financial setback. Ask your servicer directly which category applies to your situation, the documentation required differs between the two.

What to Do Instead of a Long Pause

An income-driven repayment plan lowers your monthly payment based on what you earn, sometimes to a very small amount, without stopping the clock on forgiveness the way deferment and forbearance often do. Switching to an income-driven plan keeps you in active repayment status, which matters if you are tracking progress toward Public Service Loan Forgiveness or income-driven forgiveness. Compare your estimated payment under an income-driven plan against a forbearance before you request a pause, a smaller ongoing payment sometimes costs less over time than a stretch of accruing interest with no payments at all.

Effect on Forgiveness Clocks

Most deferment and forbearance periods do not count as qualifying payments toward Public Service Loan Forgiveness or toward forgiveness under an income-driven repayment plan. A handful of specific categories, like deferment during active cancer treatment, are treated as exceptions. If you are tracking progress toward forgiveness, check your qualifying payment count directly through the PSLF Help Tool on studentaid.gov before requesting either option, since a long pause can add years to your forgiveness timeline.

Which One to Request

Apply for a deferment first if your situation matches one of the defined categories, in-school, military, or another listed qualifying reason, since it protects subsidized interest. Fall back to forbearance only when you don't meet a deferment category or you have already used up your deferment eligibility. Either way, contact your servicer before you miss a payment. A pause requested proactively protects your credit report, while one requested after you fall behind does not undo damage already reported.

Keep Records of Every Approval

Save the confirmation letter or email for every deferment and forbearance your servicer grants, along with the dates each period starts and ends. Servicer records occasionally show gaps or errors, and a saved confirmation gives you something concrete to point to if a payment status looks wrong later. Keep this file alongside your loan paperwork for as long as you carry the loan, not just until the pause ends.