If you’re enrolled at least half-time in college or grad school, your federal student loans may already be in an in-school deferment. That means you don’t have to pay while you’re hitting the books, and for subsidized loans, the government may cover the interest. For unsubsidized loans, interest still builds. This is the first thing to know: deferment is usually the better pause when you qualify, because it can save you money on interest for subsidized loans and it keeps your loans current. You don’t need to request forbearance just because money is tight during the semester. Check your servicer first.
Forbearance is a different tool. It also pauses or lowers payments, but interest keeps accruing on all loan types. For unsubsidized and private loans, that’s true in deferment too, but forbearance often has fewer protections. When the forbearance ends, unpaid interest can capitalize, meaning it gets added to your principal and starts charging interest on itself. That’s how a small pause becomes a bigger balance. Forbearance can be a lifesaver if you’re in a short-term bind, but it’s not free money. It’s more like hitting the pause button while the meter keeps running.
During school, your main job is to avoid unnecessary pauses. If you can pay even $20 or $50 a month toward interest, do it. You don’t have to enter repayment to make payments. On federal loans, you can usually make interest-only payments while in deferment. That keeps your balance from ballooning. If you have a part-time job, a paid internship, or a side hustle, send a little to the loan with the highest interest rate. This isn’t about being a hero. It’s about preventing a future you from inheriting a mess.
The tricky part is when you drop below half-time, graduate, or leave school. At that point, your in-school deferment ends. You may get a six-month grace period on federal loans, but not all loans get one, and private loans may have different rules. If you’re returning to school, you may be able to get an in-school deferment again. If you’re enrolled less than half-time, you usually won’t qualify for in-school deferment. That’s when forbearance might be an option, but talk to your servicer before you assume. Some private lenders offer their own in-school deferment or forbearance, but terms vary wildly. Read the fine print or call and ask.
You should also know the difference between general forbearance and mandatory forbearance. Mandatory forbearance is for specific situations, like certain medical conditions, national guard duty, or participation in a medical internship or residency program. General forbearance is more flexible and often granted for financial hardship, medical expenses, or other reasons at the servicer’s discretion. For students, the most relevant version may be a general forbearance if you can’t afford payments after a deferment ends. But remember: discretionary means the servicer can say no. It may also have time limits, like a maximum of twelve months at a time and three years total on some loans. Don’t wait until you’re delinquent to ask.
A smart order of operations is simple. Confirm whether you’re in an in-school deferment. Don’t request forbearance if you already have a better deferment. Check whether your loans are subsidized or unsubsidized, and pay interest on unsubsidized loans if you can. If you need a pause, ask for deferment before forbearance. If forbearance is the only option, ask how interest will be handled and whether it will capitalize. Keep records. Save emails, notes, and dates. Servicers make mistakes, and you’ll want proof.
Deferment and forbearance are not moral failures. They’re tools. The problem is using them blindly. A pause can protect your credit and keep you out of default, which matters more than a slightly higher balance in the short term. But a pause without a plan just moves the pain to future you. If you can work, pay something. If you can’t, use the right pause and set a calendar reminder to revisit it. When the pause ends, you want to be ready, not surprised. Your student debt doesn’t have to run your life while you’re in school, but it does need your attention. A ten-minute check-in with your servicer now can save you thousands later.
