What is student loan deferment?

Learn if you qualify for deferment of your federal student loans

If you're having trouble repaying your student loans, you may be eligible for various forms of student loan deferment, which would allow you to postpone your payments for a specified period of time. But it's your responsibility to contact either your lender or the organization servicing your loan to check if you qualify for such payment relief. Otherwise, you could be charged late fees.

Reasons for student loan deferment of a federal loan

Here are some of the reasons for deferment under which the law permits you to postpone repayment of your student loans. Remember that this only applies to federal student loans, such as Stafford loans or PLUS loans.

• Economic hardship - borrowers may qualify for student loan deferment of up to three years if they are experiencing economic hardship. You must contact your lender or your loan servicer to see if you qualify under the law.
• Military service - active duty deferment is available for borrowers who are called to military service during a war, other military operation or national emergency. Such borrowers may also qualify for student loan deferment of up to 180 days following their demobilization
• Post-active duty - those called up from the National Guard or other military reserves, while enrolled at least half-time, are eligible for deferment of their student loans during a 13-month period following a conclusion of active service, or until they return to at least half-time enrollment, whichever is earlier.
• Enrolled in or returning to school - if you enroll in school at least half-time, your federal loans qualify for deferment. If you have previous federal loans they may also qualify for deferment if you decide to return to school. This means while you're in school you will not have to make payments, but interest may still accrue.

Deferment of a private loan

Typically private loans may offer a deferment option; however, loans secured from private sources, such as banks, typically may not have military or economic hardship payment relief as part of their repayment terms. The terms of deferment do vary per lender and are included in the terms of the loan. Citizens offers an affordable Citizens Student Loan™ to students enrolled in school at least half-time. The Citizens Student Loan offers deferred payments until 6 months after graduation or when the student drops below half-time status.

Details about student loan deferments and interest accrual

You should note that for subsidized Stafford loans, no interest will accrue during the period of student loan deferment. But for most other federal loans, interest will continue to accrue on your unpaid balance. If you do not pay that interest during the deferral period, it will simply be capitalized, or folded into the outstanding principal due on the loan. For private loans some lenders require interest payments while in-school and others may offer deferred. Citizens Student Loan offers the option to defer interest and payments until 6 months after graduation.

Learn more about student loans options that fit your needs

Check out our student financing resources, so you have access to all of the student loan information and tools that you need. If you have more questions about financing, call a student loan specialist at 1-888-411-0266, and we'll help walk you through the process.

Additional student loan and college planning resources

Federal Student Loan Deferment: Economic Hardship

Avoiding Student Loan Forbearance