Questions To Ask Yourself Before You Defer Your Student Loan

Student loan deferment is a temporary solution.

Flickr user Sergei Melki

A student loan deferment is a temporary solution that allows you to stop making monthly loan payments for an agreed-upon period of time. This can be just the solution you are looking for if you are finding it difficult to repay your federal student loans and are at risk of getting into default.

One of the biggest advantages of student loan deferment is that — for certain loans — the interest does not accrue during the deferment period. This means once the deferment period is over, you pick up with your loan where you left off. This is unlike forbearance where the interest keeps accruing during the forbearance period.

However, it’s not as straightforward as it seems. You have to meet certain requirements to qualify for this option. Moreover, it may not always be the right option for everyone.

Asking yourself these few questions will help you determine whether you qualify for student loan deferment and also whether it is the right choice for you.

Do I qualify for student loan deferment?

You may be able to defer your loans if you meet the following requirements:

  • You’re employed as a full-time teacher in a school that is located in a designated teacher-shortage area or in public health services
  • You are on active military duty either in the Armed Forces or the National Guard
  • You’re enrolled in any of these programs—rehabilitation training, medical internship, medical residency or graduate fellowship
  • You volunteered full time for at least one year in the Peace Corps
  • You have a medical disability that has made it challenging for you to find a well-paying job

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How long can I defer my loan payments for?

If you meet the qualifying criteria, you will usually be allowed to defer your loan payments for up to three years. These three years will buy you some time that you can use to build up your finances. You will have to resume your monthly payments when the deferment period lapses.

Can I get an extension after the deferment period is over?

In most cases, no extensions are given after the 3 years are up. It may be considered only under the most extenuating circumstances but that is at the discretion of the lender.

Is the deferment the best way to avoid defaulting on my loan?

Deferment is a great alternative. It allows you to regroup and build up your finances over a period of time. You won’t worry about accruing interest on your unpaid loan amount. However, you have to be absolutely sure that you will be able to make the payments regularly after the deferment period. If you still cannot make the payments after the deferment period and the lender does not extend, your loan will go into default creating a lot of associated problems. Your credit history will be adversely affected. You will have to pay higher interest rates if you wish to take a loan for any other purpose.

Before you choose deferment, you must first talk to your lender about consolidating or refinancing your loan. Maybe you can consolidate or refinance your loan with a lower interest rate. These may be better alternatives to deferring your loan.


Lender Rates (APR) Eligibility
Earnest company logo.
Variable APR: 1.88% - 5.64%*
Fixed APR: 2.44% - 5.79%*
Undergraduate and Graduate
Lendkey company logo.
Variable APR: 1.90% - 5.25%*
Fixed APR: 2.49% - 7.75%*
Undergraduate, Graduate, Parent PLUS
Credible company logo.
Variable APR: 1.80% - 9.99%*
Fixed APR: 2.15% - 9.99%*
Undergraduate and Graduate
Laurel road company logo.
Variable APR: 1.64% - 5.65%*
Fixed APR: 2.25% - 5.75%*
Undergraduate and Graduate
Commonbond company logo.
Variable APR: 1.96% - 7.02%*
Fixed APR: 2.59% - 6.94%*
Undergraduate, Graduate, Parent PLUS
Fixed APR: 2.44% - 5.97%*
Undergraduate, Graduate, Parent PLUS
VISIT ISL Education Lending
Variable APR: 1.87% – 5.41%**
Fixed APR: 2.30% – 5.94%**
Undergraduate, Graduate, Parent PLUS
VISIT Nelnet
Variable APR: 2.94% - 4.84%*
Fixed APR: 2.99% - 4.94%*
Undergraduate and Graduate
VISIT College Ave
Variable APR: 1.86% - 6.01%*
Fixed APR: 2.47% - 5.99%*
Undergraduate and Graduate, Parent PLUS

*APR includes a 0.25% interest rate reduction for enrollment in automatic payments.

**Interest rate reduction of .25% for automatically withdrawn payments from any designated bank account (“auto debit discount”). Auto debit discount applies when full payments (including both principal and interest) are automatically drafted from a bank account. The auto debit discount will continue to apply during periods of approved forbearance or deferment if the auto debit discount was in effect at the time of receiving the forbearance or deferment. Auto debit discount will remain on the account unless (1) the automatic deduction of payments is canceled or (2) there are three consecutive automatic deductions returned for insufficient funds at any time during the term of the loan.

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