Student loan payments on pause? What to know

There’s been a sharp uptick in the number of student loan borrowers hitting the pause button on their monthly bills.

The U.S. Department of Education offers two primary ways to postpone your payments — deferments and forbearances.

Between those statuses, more than a quarter of the country’s over 40 million federal student loan borrowers had suspended their repayment progress during the third quarter, according to a recent analysis by higher education expert Mark Kantrowitz. That’s more than double the number of such borrowers with payments paused during the same period in 2024.

Here’s what to know about those relief options, and their possible consequences.

Deferments and forbearances can help student loan borrowers avoid the harsh consequences of falling behind on their bills, consumer advocates said.

“These tools to postpone payment can be critical to preventing borrowers who don’t have the ability to pay from defaulting,” said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit that helps borrowers navigate the repayment of their debt.

“Default results in big dings to credit scores, wage and tax refund garnishment as well as large collections costs being added to the loans,” Mayotte added.

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Borrowers who can’t afford their payments should explore the options for pausing their payments and potentially apply for one with the Education Department or their loan servicer, she said.

The biggest difference between a deferment and a forbearance is whether or not you’ll pay interest during the payment pause. During a deferment, interest may not accrue on certain Direct Loans, a category that covers most federal student debt, according to the Education Department.

More specifically, the government doesn’t typically charge interest to borrowers with subsidized loans while they’re in a deferment, Kantrowitz said.

As a result, if you hold those loans and are struggling to meet your bill, you should first explore if you qualify for a deferment. Some of the deferments available include a Rehabilitation Training Deferment for those enrolled in a program providing “vocational, drug abuse, mental health, or alcohol abuse” treatment, the Cancer Treatment Deferment and Unemployment Deferment. (Borrowers in the Cancer Treatment Deferment won’t be charged interest whether or not their loans are subsidized.)

There’s also the Economic Hardship Deferment, for those who may be receiving public assistance or earning below a certain income level. The number of borrowers in an Economic Hardship Deferment doubled from 50,000 in the third quarter of 2024 to 100,000 in the third quarter of 2025, Kantrowitz estimates.

There is usually a three-year lifetime limit for the unemployment deferment and economic hardship deferment, he said.

During a so-called general forbearance, the Education Department usually charges interest on all types of Direct Loans, the agency says. As a result, these payment pauses can prove costly. (You can enter a forbearance for any reason.)

The typical federal student loan borrower can see their debt grow by $219 a month in interest charges alone while they pause their payments in a forbearance, Kantrowitz calculated. (That assumes they owe the average outstanding federal student loan balance of around $39,000, and have the average interest rate of roughly 6.7%.)

For some borrowers, those charges will be better than the alternative, Mayotte said, “That is still better than having the loan go past due or defaulting.”

As of now, borrowers can be in a general forbearance for up to three years over the life of the loan, although recent legislation will change the limit to nine months out of every 24 months as of July 1, 2027.

Deferments and forbearances are “not long-term strategies for eliminating debt,” said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York.

While postponing your bills can provide temporary relief, borrowers are always better off finding an affordable way to repay their debt.

Some income-driven repayment plans, or IDRs, cap your bill at a share of your income — and you may owe as little as $10 or even $0 a month, Nierman said. You can also be making progress toward loan forgiveness under an IDR plan; that momentum is often stalled during a forbearance or deferment.

“Spending too much time in forbearance and deferment just means it will take you longer to eliminate your debt,” Nierman said.