When you’re in school and money is tight, a student loan payment can feel like a bill from a future you haven’t met yet. Federal student loans usually come with an in-school deferment, which lets you press pause while you’re enrolled at least half-time. If you don’t qualify for deferment, or you’ve already used it, forbearance may be the next option. Both can stop required payments for a while. They are not the same deal. The difference can cost you hundreds or thousands of dollars, so it’s worth understanding before you click “apply.”
Deferment is the better pause when you qualify. For subsidized federal loans, interest does not accrue during deferment. That means your balance stays where it is, and the government covers the interest. For unsubsidized loans, interest still accrues, but deferment can still be a cleaner option because it’s a legal right for certain situations. In-school deferment is common. Economic hardship deferment and unemployment deferment can help after you leave school. Military service and some medical situations may also qualify. The key is that deferment is based on specific eligibility rules, and your servicer should tell you what documentation you need. Ask your school’s financial aid office if you’re unsure.
Forbearance is more flexible, but it’s also more expensive. General forbearance is discretionary, meaning your servicer decides whether to grant it. Mandatory forbearance applies in certain situations, like medical internships or National Guard service, but most students won’t use it during school. The big catch is interest. During forbearance, interest accrues on all federal loans, including subsidized loans. That interest doesn’t disappear. When forbearance ends, unpaid interest can capitalize, which means it gets added to your principal. Then you pay interest on that interest. That’s how a short pause becomes a long-term bill.
So how do you choose? Start by checking your loan types at your servicer or the federal student aid website. If you’re enrolled at least half-time, in-school deferment is usually automatic, but verify it. If you’re not enrolled half-time, ask whether you qualify for a different deferment before you ask for forbearance. Deferment costs less. It also preserves forbearance time for a real emergency later. If you only have unsubsidized loans, both options accrue interest, so the decision may come down to eligibility and terms. Still, don’t default to forbearance just because it sounds easier.
Here’s the move that saves real money: pay interest during the pause if you can. You don’t have to make the full payment. Even twenty or thirty dollars a month toward unsubsidized interest can keep your balance from growing. If you can pay the interest on subsidized loans? You won’t owe it during deferment, so focus on unsubsidized loans first. If you can’t pay anything, that’s okay. Your job is to survive, not to be a hero. But if you have a part-time job or a little cash left after rent, sending it to interest is one of the best returns you’ll get.
Don’t assume the pause is automatic forever. If you drop below half-time, graduate, or leave school, your grace period starts. When it ends, payments resume. If you need more time, contact your servicer before the due date. Late payments can lead to delinquency, default, and credit damage. Keep records of every call, email, and application. Ask for the start date, end date, and whether interest will capitalize. Set a calendar reminder a month before the pause ends so you can plan.
Remember that deferment and forbearance are temporary tools, not forgiveness. They can help you get through a tough semester, a medical issue, or a job loss. They also extend your repayment timeline and increase what you pay overall. After school, compare income-driven repayment, which can lower payments based on your income and may count toward forgiveness after many years. Deferment and forbearance often don’t count toward that forgiveness clock, so use them deliberately.
The bottom line is simple. If you can pay, pay something. If you can’t, use deferment when you qualify, understand the interest, and talk to your servicer early. A pause is not a plan. But used wisely, it can keep you afloat while you build the plan.
