Deferment.
In plain English
Deferment is a way to temporarily stop making federal student loan payments when you meet a specific qualifying condition, such as being back in school at least half-time, unemployed, or facing economic hardship. You have to apply for it and be approved; it is not automatic. On certain loans (notably subsidized loans), the government pays the interest during deferment, so your balance does not grow. On other loans, interest still builds up and can be added to your balance later.
01Why it matters
Deferment can keep you out of default during a rough stretch, and on subsidized loans it can pause your payments without your balance growing, which is the cheapest kind of pause you can get.
02The math, step by step
You lose your job and cannot make payments. You contact your servicer, apply for an unemployment deferment, and get approved. Your payments stop for the approved period. If your loans are subsidized, no interest is added while paused. If they are unsubsidized, interest keeps building and may capitalize (get added to your principal) when the deferment ends, so ask your servicer which type you have.
03What this is NOT
Deferment is not the same as forbearance. The key difference is interest: in deferment, the government may cover interest on subsidized loans, while in forbearance interest builds up on all loan types. Deferment is usually the cheaper pause when you qualify.
04Receipts
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Plain-English answers from our glossary. Receipts included. Never advice.
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