Student Loan Deferment and Deferred Interest

Deferred student loans: postponing the inevitable

Experts in college finance warn that no one should take lightly their obligation to repay their student loan. Failure to pay—that is, defaulting on your loan—can have serious, even disastrous consequences for your financial reputation and credit score, just as it would for any other debt.

Temporary student loan deferment scenarios

On the other hand, your child may qualify for a short-term student loan deferment under a number of situations. They include:

  • Military Service, in cases of active duty service in the armed services or National Guard
  • Economic Hardship, including unemployment, might allow you to defer repayment for up to three years, if you qualify
  • Other Forms of Payment Relief, such as the right to switch repayment options once a year, are guaranteed under some federal aid programs.

Generally speaking, if your underlying loan was subsidized, interest will not continue to accumulate during the student loan deferment period.


In addition, if your son or daughter plans to teach full-time in a low-income area or in certain critical subject matters deemed in short supply (including science, math and certain foreign languages), they may qualify for deferred student loans or even cancellation of their federal student loans. For Federal Stafford Loans, this only applies to loans made on or after October 1, 1998.


With all of these student loan deferment situations, check with your lender or loan servicer for additional details.

Learn more about college loans from Citizens Bank

Find out more about our affordable financing options and helpful student financing resources. Also, learn about our Citizens Bank TruFit Student Loan™. If you have additional questions about financing options from Citizens Bank, 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

What Are Subsidized and Unsubsidized Loans?
APR 101: What Does APR Mean?
Student Loan Repayment
What happens to my loans when I graduate?