Deferments and Forbearances
Deferments and forbearances allow you to temporarily postpone your monthly payments under certain circumstances. However, your best option may not be to postpone your payments, especially if you are working towards loan forgiveness or if you are trying to stick to a specific repayment strategy.
Due to an increased potential of interest capitalization, postponing your payments could have a huge impact on how much you pay back. Additionally, delaying payments toward your interest and principal balance may impact when your loans will be paid in full.
Deferment
If you have a Direct Subsidized Loan or a subsidized portion of a Direct Consolidation Loan that has not , interest does not accrue during any approved period of deferment for these loans. This is also the case for Federal Subsidized Stafford Loans and a subsidized portion of a Federal Consolidation Loan. You are responsible for the interest that accrues daily on all other loan types.
Forbearance
You are responsible for the daily interest accrual during periods of forbearance on all loan types. If you can, paying the interest while on forbearance could save you money over the life of your loan.
Continuing Your Education
If you are returning to school or entering an internship/residency program, you may qualify for a deferment or forbearance that would postpone your payments while you continue your education.
Eligibility Quiz
Determine if your federal student loans are eligible for a deferment or forbearance.
Suspending payments can have a big impact on the overall cost of repaying your student loans. Consider making payments to limit the interest that may capitalize (be added to your balance) over time.
Review the information below to see how paying your outstanding interest can impact your monthly payment and your total amount to be repaid.
You Pay Your Outstanding Interest
Original Loan Balance
$20,000
Capitalized Interest
$0
Total Paid Prior to Repayment
$5,700
Loan Balance When Entering Repayment
$20,000
Interest Rate
6.8%
Monthly Payment
$230.16
Total Repayment Amount
$33,319.28
*This figure includes the $5,700 in interest you previously paid.
You Can't or Don't Pay Your Outstanding Interest
Original Loan Balance
$20,000
Capitalized Interest
$5,700
Total Paid Prior to Repayment
$0
Loan Balance When Entering Repayment
$25,700
Interest Rate
6.8%
Monthly Payment
$295.76
Total Repayment Amount
$35,490.77
In the example above you would save more than $65 per month if you paid the outstanding interest before it capitalized (was added to the principal balance). This amounts to potential savings of more than $2,000 over the life of the loan!
Serving on Active Duty
You may qualify to postpone your payments during a period of active duty service if you are:
- Serving on qualifying National Guard duty,
- Serving as a reservist or retired member of the Armed Forces,
- Serving as any other member of the Armed Forces who has been assigned to a duty station at a location other than the location where you are normally assigned, or
- Serving as a member of the National Oceanic and Atmospheric Administration (NOAA) or officer of the Commissioned Corps of the Public Health Service, depending on the dates your loans were disbursed.
Eligibility Quiz
Determine if your federal student loans are eligible for a deferment or forbearance.
Options to Postpone Payments for Endorsers and Co-makers
If you are interested in applying for a deferment or forbearance, you should know what your options are.
Endorser
- Deferment—Only the borrower can request a deferment.
- Forbearance—Either you or the borrower can request a forbearance.
Co-maker
- Deferment—Both you and the borrower need to request and qualify for a deferment for the same timeframe. It does not have to be the same type of deferment.
- Forbearance—Both you and the borrower need to request and qualify for a forbearance for the same timeframe. It does not have to be the same type of forbearance.
