What Is In-School Deferment for Student Loans?
How to Stop or Reduce Student Loan Payments While You're in School
It’s tough to cover your expenses, much less pay down debt, when you’re a student. Studying, attending class, and completing your coursework leaves little time for earning an income. If you have existing student debt and attend school, in-school deferment might give you the breathing room you need to continue your education.
An in-school deferment is a type of student loan deferment that lets you pause payments on your student loans while you’re still enrolled in school.
To take advantage of an in-school deferment, you must be enrolled at least half-time in an eligible college or career school. Federal direct loans, Federal Family Education Loans (FFEL), Perkins loans, and PLUS loans are generally eligible. Parent borrowers are sometimes eligible, but you should contact the school’s student aid office to verify. Some private student loans also allow deferment, although lenders might use different criteria. Confirm with the private lender what the requirements are.
If you're in school and are borrowing federal student loans, you may be placed in deferment automatically. Your loan servicer—the company that sends loan statements to you, even if you’ve borrowed with federal student loans—should notify you that the deferment has been granted. If you are eligible but haven't heard from your servicer, contact your school so they can reach out to the servicer with your enrollment information.
Parent borrowers will need to request the deferment through the loan servicer.
How to Request In-School Deferment
If you want to request an in-school deferment from your servicer, follow these steps.
- Complete forms: Fill out an in-school deferment request form and submit it to your loan servicer. You should be able to find the forms on your loan servicer's website or the federal government's student financial aid website; just download the form and fill it out.
- Verify enrollment: Your loan servicer will verify that you are enrolled at least half-time. This can happen electronically, but in some cases, you’ll need an official at your school to sign off on your request. If so, visit your student aid office to get verification.
- Wait for approval: Keep making the payments on your loan until you get confirmation from your loan servicer that your request was approved. If you miss payments before your deferment becomes active, you could become delinquent on your loan, risking default, and your credit scores can suffer, too.
How Long Does In-School Deferment Last?
If your request is approved, you can stay in deferral for as long as you continue to meet the requirements, which means enrollment in an approved institution at least half-time. Your loan can also be deferred for up to six months after you graduate or leave school; this is known as the grace period.
Borrowers who have not elected (or qualified) to defer payments will be expected to begin repaying the loan as soon as it's been paid out.
Interest Costs and Payments
If approved, you can stop making payments, but interest charges don’t stop:
- If you have certain subsidized loans, the federal government may pay those charges during deferment.
- If you have unsubsidized loans, interest will continue to accrue.
You’re not required to make payments during deferment, but you have the option to do so. It is wise to pay at least the interest charges. If you pay nothing, those interest charges will be capitalized, meaning your loan balance will actually increase over time, even though you haven’t received any more money. While completing your deferment forms, look for the option that says: “I wish to make interest payments on my unsubsidized loan(s) during my deferment.”
If You Don’t Qualify
If your request is denied, you might have other options. Contact your loan servicer immediately if you’re having a hard time making payments.
A forbearance provides another option if your required monthly payments are too high for the amount of income you bring in. You can temporarily stop making payments, but interest will accrue on your debt.
Income-driven repayment plans allow you to make smaller monthly payments. In some cases, those payments are very low—sometimes $5, or nothing at all, depending on your income. You can use the Department of Education's repayment estimator to get an idea of what your payments might be with one of these plans.