Deferment and forbearance both pause your federal student loan payments, but they aren’t interchangeable. The key difference in forbearance vs deferment on student loans is interest: during deferment on Direct Subsidized Loans, the government covers the interest that would otherwise accrue, while forbearance always leaves that interest to you. Eligibility works differently too. Deferment requires a specific qualifying circumstance defined in federal regulation, and forbearance is either mandated for a short list of situations or granted at your servicer’s discretion. Picking the wrong pause can add thousands to your balance.
How Interest Works Under Each Option
The cost gap between the two options comes down to who pays interest while your payments are on hold.
On Direct Subsidized Loans in deferment, the federal government pays the interest that accrues. Your balance stays exactly where it was when the pause started.1eCFR. 34 CFR 685.204 – Deferment
Direct Unsubsidized Loans and PLUS Loans don’t get that subsidy. Interest keeps building during deferment, and if you don’t pay it as it accrues, your servicer adds it to the principal balance when the deferment ends. That capitalization means you start paying interest on a larger amount going forward.1eCFR. 34 CFR 685.204 – Deferment
Forbearance costs more across every loan type. Interest accrues on all loans during forbearance, and unpaid interest capitalizes. One narrow exception: when your servicer places you in administrative forbearance for up to 60 days while processing a deferment, repayment plan change, or consolidation, interest during that window does not capitalize.2eCFR. 34 CFR 685.205 – Forbearance
Cancer treatment deferment is the one situation where every loan type, including unsubsidized and PLUS loans, receives an interest subsidy.3FSA Partners. Deferment for Cancer Treatment for Direct Loan, FFEL, and Perkins Loan Program Borrowers
When You Can Get a Deferment
Deferment is tied to specific life circumstances. You need to fit a recognized category and provide documentation.
Enrolled in School
If you’re enrolled at least half-time at an eligible college or career school, your loans usually go into deferment automatically. Your school reports your enrollment to the National Student Loan Data System, and your servicer applies the deferment without a separate application in most cases. Graduate fellowship programs and approved rehabilitation training programs, including vocational, mental health, substance abuse, and alcohol abuse treatment programs, also qualify.4Federal Student Aid. Student Loan Deferment
Parent PLUS borrowers whose loan was first disbursed on or after July 1, 2008 can defer while the student is enrolled at least half-time and for six months after the student drops below half-time.5FSA Partners. Delayed Repayment Option – Parent Direct PLUS Loan
Economic Hardship or Unemployment
Borrowers receiving means-tested public assistance qualify for an economic hardship deferment. SNAP, TANF, Supplemental Security Income, and state general public assistance all count.6Federal Student Aid. Economic Hardship Deferment Request Peace Corps volunteers can use this deferment for the duration of their service.
If you’re looking for full-time work and can’t find it, an unemployment deferment is available. The maximum is 36 months total, granted in increments of up to six months, so you reapply periodically with proof you’re still searching.7Federal Student Aid. Unemployment Deferment Request
Military Service or Cancer Treatment
Service members on active duty during a war, military operation, or national emergency, and qualifying National Guard duty during those conditions, are eligible for a military service deferment.8eCFR. 34 CFR 682.210 – Deferment
Borrowers receiving cancer treatment can defer all eligible federal loans during treatment and for six months after it ends. There’s no fixed time limit, though your servicer may initially approve one year and require a new physician certification to extend it.3FSA Partners. Deferment for Cancer Treatment for Direct Loan, FFEL, and Perkins Loan Program Borrowers
When Forbearance Is Mandatory
Mandatory forbearance still accrues interest like any forbearance, but your servicer must grant it if you meet the criteria. You don’t have to convince anyone your hardship is serious enough.2eCFR. 34 CFR 685.205 – Forbearance The qualifying categories:
- Your total monthly federal loan payments equal or exceed 20 percent of your total monthly gross income. Verified with pay stubs or tax returns, granted in 12-month increments up to three years total.9Federal Student Aid. Mandatory Forbearance Request – Student Loan Debt Burden
- You’re serving in a medical or dental internship or residency you must complete before practicing.
- You’re a National Guard member activated by a governor for state duty who doesn’t qualify for the military service deferment.10eCFR. 34 CFR 682.211 – Forbearance
- You’re performing qualifying teaching service toward Teacher Loan Forgiveness, as long as the expected forgiveness would cover the remaining balance.11Federal Student Aid. 4 Loan Forgiveness Programs for Teachers
- You’re serving in an approved AmeriCorps position.12eCFR. 45 CFR 2525.320 – What Steps Are Necessary to Obtain Forbearance
- You’re receiving student loan repayment benefits through a Department of Defense program.
Each category requires documentation from an employer, program administrator, or physician. Meet the criteria and provide the paperwork, and approval is not optional.
Discretionary Forbearance as the Fallback
When you don’t fit a deferment or mandatory forbearance category, discretionary (also called general) forbearance is the fallback. Your servicer decides based on your explanation of the hardship. Common reasons include job loss, unexpected medical costs, and other financial disruptions. Approval isn’t guaranteed.
Each general forbearance request can last up to 12 months. Perkins Loans carry a hard cumulative cap of three years. For Direct Loans and FFEL loans, your servicer may set its own cumulative limit, but there’s no fixed federal cap.13Federal Student Aid. General Forbearance Request Most servicers ask for a written explanation, and some request supporting documents like medical bills or a termination letter.
Because interest capitalizes on every loan type during discretionary forbearance with no subsidy from anywhere, this is the most expensive way to pause payments. Treat it as a last resort.
What Pausing Payments Does to Forgiveness Progress
Time spent in deferment or forbearance generally does not count toward the 120 qualifying payments for Public Service Loan Forgiveness or the 20- to 25-year requirement for income-driven repayment forgiveness.14Federal Student Aid. Get Temporary Relief – Deferment and Forbearance Every paused month is a month that doesn’t bring you closer to forgiveness.
The exceptions are limited. Certain deferment periods, including economic hardship and military deferments after 2013, can count toward IDR forgiveness.15Consumer Financial Protection Bureau. Student Loan Forgiveness If you work in public service or plan to rely on income-driven repayment for the long haul, pausing payments with forbearance can set you back years.
Consider Income-Driven Repayment First
Before requesting forbearance, check whether an income-driven repayment plan is a better fit. IDR sets your monthly payment based on your income and family size, and the payment can drop to $0 if your earnings are low enough.16Federal Student Aid. Income-Driven Repayment Plans Every month on an IDR plan counts toward forgiveness, including months where you pay nothing. Forbearance months generally don’t.
IDR also keeps you in active repayment, which matters for credit reporting and for maintaining eligibility for other federal loan benefits. Enrolling takes more paperwork than requesting forbearance, but the long-term savings can be significant. If you’re seeking PSLF, Federal Student Aid explicitly recommends repaying under an IDR plan rather than pausing.16Federal Student Aid. Income-Driven Repayment Plans
How Each Option Shows Up on Your Credit Report
Neither deferment nor forbearance is a missed payment, so neither directly hurts your credit score. What matters is having the status applied before you miss a due date. If you stop paying and apply for forbearance weeks later, any gap could be reported as delinquent once you reach 90 days past due.
Servicers report the two statuses differently. During deferment, the loan’s payment frequency is reported as “deferred.” During forbearance, a special comment indicates the loan is in forbearance.17Nelnet – Federal Student Aid. Credit Reporting Neither notation damages your score the way delinquency or default would, but lenders reviewing your full report will see that you weren’t making payments. That context can matter when you apply for a mortgage.
Loans become delinquent at 90 days past due and enter default at 270 days past due, which causes serious credit damage.17Nelnet – Federal Student Aid. Credit Reporting Apply before you miss payments, not after.
Private Loans and Loans in Default
Everything above applies to federal student loans. Private lenders operate under your loan contract, not federal regulation. There’s no legal entitlement to deferment or forbearance on a private loan. Your lender may offer one or both, but terms, duration, fees, and interest treatment are entirely at the lender’s discretion.18Consumer Financial Protection Bureau. Is Forbearance or Deferment Available for Private Student Loans Most private lenders don’t distinguish meaningfully between the two. Interest almost always continues to accrue, no government subsidy applies, and some lenders charge fees. Keep making payments until your lender formally confirms approval.
If your federal loans have already gone into default, you lose access to both deferment and forbearance, along with income-driven repayment and other federal benefits. To regain eligibility, bring the loans out of default through loan rehabilitation or consolidation. Rehabilitation clears the default notation from your credit report; consolidation restores access to federal repayment options without removing the default history.