How to Pause Student Loan Payment

In this article, I’ll walk you through how to Pause Student Loan Payment step by step, focusing on the main methods and other strategies to make your payments more manageable. If you’re struggling to keep up with your student loan payments, I’ve been there, and I know how stressful it can feel.

The good news is that there are ways to pause your student loan payments, giving you some breathing room when life gets tough. Whether you’re dealing with a job loss, medical expenses, or just need a break, options like deferment and forbearance can help.

Before we dive into the details, let’s talk about why you might need to pause your payments. Maybe you’re back in school, facing unexpected financial challenges, or serving in the military. Whatever the reason, pausing your payments can prevent missed payments from hurting your credit or leading to default.

I’ll explain the differences between deferment and forbearance, how to apply for them, and other options you might consider. Let’s get started!

How to Pause Student Loan Payments

Pausing your student loan payments is possible through two primary methods: deferment and forbearance. Both can give you a temporary break from payments, but they work differently, and choosing the right one depends on your situation.

Deferment lets you stop payments under specific circumstances, and for some federal loans, the government might cover the interest. Forbearance also pauses or reduces payments, but interest usually keeps adding up, which can increase your loan balance. Understanding these options is the first step to making an informed decision.

Here’s a quick overview of what we’ll cover: deferment and forbearance for federal and private loans, how to apply for each, and other ways to make your payments more affordable. I’ll also share some tips from my research and experiences to help you navigate the process. By the end, you’ll have a clear idea of how to pause your student loan payments and what to consider before doing so.

What is Deferment?

Deferment is like pressing the pause button on your student loan payments. It allows you to temporarily stop making payments without penalties, and for certain federal loans, the government may pay the interest during this period.

This can be a lifesaver if you’re in school, unemployed, or facing economic hardship. Here’s what you need to know about deferment:

• Eligibility: You can qualify for deferment under specific conditions, such as being enrolled at least half-time in an eligible school, being unemployed and actively seeking work, or experiencing economic hardship (like receiving public assistance or having income below 150% of your state’s poverty guidelines). Other situations, like active-duty military service or undergoing cancer treatment, also qualify.
• Types of Deferment: There are several types, each with its own rules:
  • In-School Deferment: Automatically applied if you’re enrolled at least half-time in an eligible college or program. It lasts as long as you’re enrolled and through a six-month grace period after you graduate or leave school.
  • Unemployment Deferment: Available if you’re receiving unemployment benefits or actively seeking full-time work. You can get up to 36 months, reapplying every six months.
  • Economic Hardship Deferment: For those with low income or in programs like the Peace Corps. It’s granted in 12-month increments, up to 36 months.
  • Military Service Deferment: Covers active duty during a war, military operation, or national emergency, lasting as long as you’re on duty plus 13 months after.
  • Cancer Treatment Deferment: Available during treatment and for six months afterward.
• Interest: For subsidized federal loans (like Direct Subsidized Loans or Perkins Loans), the government pays the interest during deferment, so your loan balance doesn’t grow. For unsubsidized loans or private loans, interest accrues, and if unpaid, it may be added to your principal balance, increasing what you owe.
• Duration: Most deferments have a maximum of 36 months, except for in-school deferment, which lasts as long as you’re enrolled. Check with your loan servicer to confirm your eligibility and limits.

How to Apply for Deferment

Applying for deferment is straightforward, but you need to follow the right steps to avoid issues. Here’s how I’d recommend you go about it:

1. Find Your Loan Servicer: Your loan servicer manages your loan payments. You can find out who they are by logging into your account on the Federal Student Aid website (studentaid.gov) or checking your loan statements.
2. Choose the Right Deferment Type: Based on your situation, pick the deferment that fits. For example, if you’re back in school, go for in-school deferment. If you’re unemployed, apply for unemployment deferment.
3. Gather Documentation: Some deferments require proof, like a letter from your school confirming enrollment or documentation of unemployment benefits. Check the specific requirements for your deferment type on the Federal Student Aid website.
4. Submit Your Application: Most services allow you to apply online, by mail, or over the phone. You can find deferment request forms at studentaid.gov. Fill out the form accurately and include any required documents.
5. Keep Making Payments Until Approved: Don’t stop paying your loans until your servicer confirms your deferment is approved. Missing payments could lead to delinquency or default, which can hurt your credit.

Once approved, your payments will be paused, and you’ll get a break until the deferment period ends. Keep track of when it ends so you can plan for resuming payments.

What is Forbearance?

Forbearance is another way to pause or reduce your student loan payments, but it comes with a catch: interest accrues on all loans during this period. This means your loan balance could grow, making it a more expensive option in the long run. Still, it’s a helpful tool if you’re facing temporary financial challenges. Here’s the breakdown:

• Eligibility: Forbearance is typically granted for financial hardship, such as job loss, medical expenses, or other situations that make it hard to pay your loans. It’s also available for specific circumstances, like serving in AmeriCorps or having a high loan payment relative to your income.
• Types of Forbearance: For federal loans, there are two main types:
  • General Forbearance: Granted at your loan servicer’s discretion for reasons like financial difficulties or illness. It’s available for up to 12 months at a time, with a total limit of 36 months for Direct Loans.
  • Mandatory Forbearance: Required by the Department of Education for situations like serving in AmeriCorps, medical彼此
• Interest: Unlike deferment, interest accrues on all loans during forbearance, including subsidized federal loans. If you don’t pay the interest as it accrues, it may be capitalized (added to your principal balance), increasing your total debt.
• Duration: General forbearance is granted in 12-month increments, up to 36 months total. Mandatory forbearance can also be granted for 12 months at a time and may be renewable indefinitely, depending on the situation.

How to Apply for Forbearance

Applying for forbearance is similar to applying for deferment, but the requirements can vary slightly. Here’s how you can do it:

1. Contact Your Loan Servicer: Reach out to your servicer to discuss your situation. You can find their contact information on your loan statements or at studentaid.gov.
2. Explain Your Need: Be clear about why you need forbearance, whether it’s due to financial hardship, medical issues, or another qualifying reason. Your servicer may ask for supporting documents, like pay stubs or medical bills.
3. Complete the Application: Your servicer will provide a forbearance request form, which you can often submit online or by mail. Forms for general forbearance and specific mandatory forbearances (like AmeriCorps or student loan debt burden) are available at studentaid.gov.
4. Submit Documentation: If required, provide proof of your situation, such as income statements or program enrollment verification.
5. Continue Payments Until Approved: Keep making your regular payments until you receive confirmation that your forbearance is approved to avoid falling behind.

Once approved, your payments will be paused or reduced, but remember to check whether interest is accruing and consider paying it if possible to avoid a larger loan balance.

Pausing Payments on Private Student Loans

If you have private student loans, pausing payments can be trickier because each lender has its own policies. Here’s what you should know:

• Deferment: Some private lenders offer deferment, especially if you’re in school or on active military duty. However, interest typically accrues during deferment, which can increase your loan balance.
• Forbearance: Many private lenders provide forbearance for financial hardship, often up to 12 months. For example, Earnest offers forbearance for reasons like job loss or large essential expenses, but interest will accrue (help.earnest.com).
• Skip-a-Payment Programs: Some lenders, like Earnest, allow you to skip one payment per year if you’ve made six consecutive on-time payments and your loan is in good standing. Interest still accrues, and this may extend your repayment term (help.earnest.com).
• How to Apply: Contact your lender directly to discuss your options. Review your loan agreement for details on deferment or forbearance policies, and be prepared to provide documentation of your financial situation.

Since private loan terms vary, it’s crucial to understand your lender’s specific requirements and the impact of pausing payments on your loan balance.

Other Options to Make Payments More Manageable

If pausing payments isn’t the best fit, there are other ways to make your student loan payments more affordable. Here are some options I’ve found helpful to consider:

1. Income-Driven Repayment (IDR) Plans: For federal loans, IDR plans to adjust your monthly payment based on your income and family size. Payments can be as low as $0 if your income is very low, and after 20–25 years, any remaining balance may be forgiven (though you might owe taxes on the forgiven amount). Apply at studentaid.gov/idr.
2. Extended Repayment Plan: If you have a high loan balance, this plan extends your repayment term to 25 years, lowering monthly payments but increasing the total interest paid. Learn more at studentaid.gov.
3. Graduated Repayment Plan: This starts with lower payments that increase every two years, ideal if you expect your income to grow. It’s available for federal loans and can be explored at studentaid.gov.
4. Refinancing: For private loans or federal loans you’re willing to convert to private, refinancing can lower your interest rate, reducing monthly payments. However, you’ll lose federal benefits like IDR or loan forgiveness. Check options with lenders like Earnest (earnest.com).
5. Loan Consolidation: Combining multiple federal loans into one can extend your repayment term, lowering monthly payments but increasing total interest. Explore this at studentaid.gov.

These options can help you avoid pausing payments altogether, especially if your financial challenges are long-term.

Comparing Deferment and Forbearance

To help you decide which option is best, here’s a table comparing deferment and forbearance for federal loans:

For private loans, terms vary by lender, so always check with your servicer.

FAQs

1. Can I pause payments on both federal and private student loans?
   Yes, but federal loans have standardized deferment and forbearance options, while private loan terms depend on your lender’s policies.
2. Will pausing my payments affect my credit score?
   No, if you’re in approved deferment or forbearance. However, unpaid interest during forbearance may increase your loan balance, affecting future payments.
3. How long can I pause my payments?
   For federal loans, most deferments and forbearances are capped at 36 months total, except in-school deferments. Private loan terms vary by lender.
4. What happens after my deferment or forbearance ends?
   You’ll resume regular payments. Contact your servicer before the period ends to discuss repayment options, as your payment amount may change.
5. Can I get deferment or forbearance multiple times?
   Yes, but federal loans have a 36-month limit for most types. Private loans depend on lender policies.
6. Do I need to pay the interest that accrues during forbearance?
   You’re not required to pay it during forbearance, but unpaid interest may be capitalized, increasing your loan balance and future interest costs.

References

• Federal Student Aid
• Earnest
• USAGov
• NerdWallet
• Sallie Mae