Postpone Student Loan Repayment

Should I postpone paying my federal student loans?

You may not need to, but it will depend on your specific situation. Here are some things to consider:

• If your inability to pay is a long-term issue, enrolling in an Income Driven Repayment (IDR) plan may be best. An IDR plan allows you to make payments based on your income and household size. If you have no income because you don’t have a job, that payment can be as low as $0. There are additional benefits to being in an IDR plan, like loan forgiveness.
• If you just need short-term relief because life happened, postponing repayment may be a good option. You will need to find out if you qualify for a deferment or forbearance by calling your student loan servicer.

Caution: It is not uncommon for servicers to grant a forbearance on the spot because they have discretion to do so. But know this will increase your total loan debt because interest will accrue and capitalize.

Tip: Rather than postponing repayment through a deferment or forbearance, getting an Income Driven Repayment plan may be a better solution.

What are my options to postpone repayment?

Here are the most common options and circumstances that allow you to postpone repayment:

• Grace period. You get 6 months to start repaying after graduation, once you leave school, or if you drop below half-time enrollment status.
• Deferment. Eligibility is based on the type of loan and when the loan was obtained. There are also various circumstances that may qualify you for a deferment, like being in school, experiencing a financial hardship, receiving cancer treatment, or being on active military duty. In-school deferments are usually automatic.  For others, you must contact your servicer and apply.
• Forbearance. A servicer has discretion to grant a forbearance for things like financial hardship, medical expenses, and other reasons. You can also get a forbearance if you are serving in Americorps, doing a medical or dental internship, or  if your monthly payment is more than 20% of your gross income. You must contact your servicer to get a forbearance.

Tip: Avoid deferment and forbearance if you can. If you qualify for a deferment, remember that it is better than a forbearance because your subsidized loans will not accumulate interest. Interest will accumulate for all loans with a forbearance.

My loans are in default, am I eligible for a deferment or forbearance? 

• You are generally not eligible for a deferment or forbearance if you have defaulted on your loans. Refer to our “Prevent or Get Out of Default” self-help topic for more information.