Deferment is the better way to pause federal student loan payments when you qualify for it, because the government pays the interest on your Direct Subsidized Loans while payments are stopped. Forbearance is easier to get and often faster, but interest accrues on every loan type and gets added to your principal when the pause ends. That is the practical shape of student loan deferment versus forbearance: same effect on your monthly bill, very different effect on what you owe when the pause is over.
Before choosing either one, check whether an income-driven repayment plan could drop your payment to an amount you can handle, sometimes as low as $0. A qualifying IDR payment keeps you moving toward forgiveness. A pause usually does not.
The Core Difference Is Interest
Both options stop your required monthly payment without putting you in default. What separates them is who pays interest during the pause.
During a deferment, the federal government covers interest on Direct Subsidized Loans, so those balances stay flat.1eCFR. 34 CFR 685.204 – Deferment Unsubsidized loans and PLUS loans still accrue interest during a deferment, but at least the subsidized portion is protected. During a forbearance, interest accrues on every loan type with no subsidy at all.2eCFR. 34 CFR 685.205 – Forbearance
When the pause ends, the unpaid interest capitalizes, meaning it gets folded into your principal balance.3eCFR. 34 CFR 685.202 – Charges for Which Direct Loan Program Borrowers Are Responsible From that point on, you are paying interest on a bigger number. On a $40,000 unsubsidized loan at 6.5 percent, a 12-month forbearance adds roughly $2,600 to your principal, and over a 10-year payoff that capitalized amount generates its own interest.
If you use either option on unsubsidized loans, paying just the interest as it accrues prevents capitalization. Most servicers allow interest-only payments during a pause.
Who Qualifies for Deferment
Deferment eligibility is set by federal regulation. If you meet the criteria and document it, your servicer must grant it.1eCFR. 34 CFR 685.204 – Deferment The main categories:
- In-school enrollment at least half-time at an eligible school, certified by your registrar.
- Unemployment, if you are actively seeking full-time work of 30 or more hours per week. Granted in six-month blocks, up to 36 months total across the life of your loans.4Federal Student Aid. Unemployment Deferment Request
- Economic hardship, if you receive federal or state public assistance such as SNAP or SSI, work full-time but earn no more than 150 percent of the federal poverty guideline for your family size, or serve in the Peace Corps. Granted one year at a time, up to three years total.
- Active-duty military service. The Servicemembers Civil Relief Act separately caps interest at 6 percent on loans taken before entering active duty, and that cap reaches both federal and private student loans.5Consumer Financial Protection Bureau. Should I Delay Repaying My Student Loans While I Serve in the Military
- Cancer treatment, for the entire duration of treatment plus six months afterward. There is no fixed cap if a physician recertifies annually.6Federal Student Aid. Deferment for Cancer Treatment
Who Qualifies for Forbearance
Forbearance splits into two types, and the distinction decides whether your servicer can turn you down.
General (Discretionary) Forbearance
Your servicer decides whether to grant it. You can request it for financial difficulty, medical expenses, or other hardship, but approval is not guaranteed. It runs up to 12 months at a time, with a cumulative cap of three years.7Federal Student Aid. Student Loan Forbearance You can often request it by phone without paperwork, which is why it is the fastest form of relief when you need breathing room this week.8Consumer Financial Protection Bureau. What Is Student Loan Forbearance
Mandatory Forbearance
If you meet the criteria, your servicer has no discretion and must grant it.2eCFR. 34 CFR 685.205 – Forbearance The qualifying situations include a medical or dental internship or residency (once deferment eligibility is exhausted), qualifying national service such as AmeriCorps, and a debt-to-income situation where your total monthly federal student loan payments equal or exceed 20 percent of your total monthly gross income. That last one is granted for up to three years and catches more borrowers than you would expect: on $3,000 in gross monthly income, combined federal payments of $600 or more qualify.
What a Pause Does to Forgiveness
This is where pausing gets expensive in a way the monthly bill does not show. Public Service Loan Forgiveness requires 120 qualifying monthly payments, and months spent in deferment or forbearance generally do not count, because you are not making payments.9MOHELA – Official Servicer of Federal Student Aid. Public Service Loan Forgiveness (PSLF) Information A borrower who uses 12 months of forbearance while working for an eligible PSLF employer has pushed their forgiveness date back a full year.
The same logic applies to income-driven repayment forgiveness, where balances are forgiven after 20 or 25 years of qualifying payments. Forbearance months typically do not count toward that clock either. The Department of Education did conduct a one-time IDR account adjustment that credited certain deferment and forbearance periods toward forgiveness, but that was a temporary administrative action rather than a permanent rule.
Consider Income-Driven Repayment First
Before requesting a pause, check whether an IDR plan produces a payment you can actually afford. IDR plans set your monthly payment based on your income and family size, and payments can drop to $0 if income is low enough.10Consumer Financial Protection Bureau. Options for Repaying Your Federal Student Loan A $0 IDR payment still counts as a qualifying payment for PSLF and IDR forgiveness. Forbearance does not.
IDR requires annual income recertification, and missing the deadline creates its own problems. But if you are on a forgiveness track, switching to IDR instead of forbearance keeps the clock running. The Loan Simulator at StudentAid.gov can estimate what different plans would cost you each month.
Effect on Your Credit
An approved deferment or forbearance should not damage your credit score. Your account is reported as in deferment or forbearance rather than delinquent, and no missed payments hit your credit report. The risk sits in the gap between requesting the pause and having it applied. If a due date passes while the request is still processing and you have not paid, that missed payment can be reported late.
Keep making payments until you receive written confirmation that the pause is in effect. Payments made during a deferment or forbearance simply reduce your balance.
Private Student Loans Are a Different System
Federal deferment and forbearance rules do not govern private student loans. Options depend on your loan agreement and the lender. Most private lenders offer some form of hardship forbearance, but terms vary: some allow three months, some up to 12, some charge fees, and some require a minimum payment history first. Interest always accrues, no government subsidy applies, and interest typically capitalizes when the pause ends. The Servicemembers Civil Relief Act 6 percent cap does reach private loans taken before entering active duty.5Consumer Financial Protection Bureau. Should I Delay Repaying My Student Loans While I Serve in the Military
If you have a co-signer, ask before requesting a pause. Many lenders require a set number of consecutive on-time payments before releasing a co-signer, and a forbearance can interrupt that count.11Consumer Financial Protection Bureau. Co-Signed a Private Student Loan? Here Are Tips to Protect Yourself
How to Request a Pause
Documentation depends on the type. Economic hardship deferment typically requires recent pay stubs or your most recent federal tax return. In-school deferment requires certification from an authorized school official.12Department of Education. In-School Deferment Request Military deferments need official orders. Cancer treatment deferment needs physician certification.13Federal Student Aid. Cancer Treatment Deferment Request
Forms live at StudentAid.gov, and most servicers accept requests through their online portals, with many online submissions processed within 24 hours.14Nelnet – Federal Student Aid. FAQ – Deferment and Forbearance Mailed requests generally take about 10 business days after receipt. General forbearance is often the fastest because you can request it by phone with no documentation.
Keep paying on your regular schedule until you get written confirmation. When approval comes, your servicer sends a notice with the start and end dates. Put the end date on your calendar. Missing the first payment after a pause is one of the most common ways borrowers slide into delinquency.