A Deferment is an agreement between a borrower and their lender to reduce or postpone repayment for a designated period of time based on meeting specific conditions. For most federal student loans in the borrower's own name, loan repayment may be deferred while the borrower is:
- enrolled at least half-time
- in the six-month grace period after they graduate or cease to be enrolled for at least half-time (only eligible once per loan)
- enrolled in a approved disability rehabilitation training program
- serving in the Peace Corps for you to three years
- unemployed for up to three years
- experiencing demonstrated economic hardship for up to three years
- * active duty military service in connection with a national emergency, military operation, or war
- in a 13-month period following the conclusion of their active duty military service in connection with a national emergency, military operation, or war or or re-enroll at least a half-time basis, whichever is earlier
On Federal Direct Subsidized Loans, interest will be paid on behalf of the borrower by the federal government. For unsubsidized loans, interest continue to accrue and is capitalized once prior to enter back into repayment.
A Federal Parent PLUS borrower is eligible for deferment of interest and principal while the student whom the loan was obtained is enrolled at least half time and during that student's grace period.