With nearly two decades in journalism, Dori Zinn has covered loans and other personal finance topics for the better part of her career. She loves helping people learn about money, whether that’s preparing for retirement, saving for college, crafting.
Dori Zinn Loans WriterWith nearly two decades in journalism, Dori Zinn has covered loans and other personal finance topics for the better part of her career. She loves helping people learn about money, whether that’s preparing for retirement, saving for college, crafting.
Written By Dori Zinn Loans WriterWith nearly two decades in journalism, Dori Zinn has covered loans and other personal finance topics for the better part of her career. She loves helping people learn about money, whether that’s preparing for retirement, saving for college, crafting.
Dori Zinn Loans WriterWith nearly two decades in journalism, Dori Zinn has covered loans and other personal finance topics for the better part of her career. She loves helping people learn about money, whether that’s preparing for retirement, saving for college, crafting.
Loans WriterBrianna McGurran is the Loans Analyst for Forbes Advisor. Most recently, she was a staff writer and spokesperson at NerdWallet, where she wrote "Ask Brianna," a financial advice column syndicated by the Associated Press. As spokesperson, she also con.
Brianna McGurran is the Loans Analyst for Forbes Advisor. Most recently, she was a staff writer and spokesperson at NerdWallet, where she wrote "Ask Brianna," a financial advice column syndicated by the Associated Press. As spokesperson, she also con.
Written ByBrianna McGurran is the Loans Analyst for Forbes Advisor. Most recently, she was a staff writer and spokesperson at NerdWallet, where she wrote "Ask Brianna," a financial advice column syndicated by the Associated Press. As spokesperson, she also con.
Brianna McGurran is the Loans Analyst for Forbes Advisor. Most recently, she was a staff writer and spokesperson at NerdWallet, where she wrote "Ask Brianna," a financial advice column syndicated by the Associated Press. As spokesperson, she also con.
Updated: Apr 15, 2021, 5:00am
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If you’ve lost your job or you aren’t currently working, you might qualify for student loan deferment.
Unemployment deferment, which is available for federal student loans and some private loans, pauses your student loan payments until you’re able to afford to make payments again. If you need help with your student loans while you get on your feet, you might want to think about unemployment deferment.
Student loan unemployment deferment is pausing payments on your student loans because you’re not working.
If you can’t afford to repay your student loans, not paying at all means you’d fall behind. As a result, your credit score will drop, and after enough missed payments, your loans could end up in default. Not paying your student loans could have a longstanding impact on your credit and financial health.
Deferment gives you the chance to stop making payments while keeping your loans in good standing—meaning, not in default. It’s a good idea for borrowers who can’t afford to make payments while they don’t have a job. But keep in mind there might be other repayment options that best fit your budget right now. This includes income-driven repayment (IDR) plans and the current federal Covid-19 relief, which provides a pause on federal loan payments through September 2021.
Your unemployment deferment options depend on what type of loans you have: federal or private student loans. Almost all federal loans qualify for some time of deferment, but private lenders aren’t as forgiving.
Deferment doesn’t automatically begin if you lose your job or can’t afford to make payments. For federal loans, you’ll need to complete an unemployment deferment request.
You can defer your federal student loans for up to three years. If you’re looking for a job and can’t find employment or you’re receiving unemployment benefits, you might be eligible.
While you’re not required to make payments on your loan, interest will continue to accrue on unsubsidized loans (no interest will accrue on subsidized loans). You can choose to pay that interest during the deferment period or have it added to your principal loan balance.
When you resume payments, they might be higher than what you were paying before due to the capitalized interest. Keep this in mind if you decide to choose unemployment deferment. It might significantly increase the total amount you owe in student loan debt.
Federal unemployment deferment lasts until you’ve gotten a job, up to a maximum of 36 months. You’ll need to reapply every six months to continue to receive unemployment deferment.
Not all lenders offer this type of deferment. If you want to see if you’re eligible for unemployment deferment, you’ll need to contact your lender.
There’s no universal standard that all private student loan lenders must follow, which means there’s a chance your lender might not offer unemployment deferment. With that said, you might qualify for other forbearance or economic hardship programs through your private lender.
Unemployment Deferment Alternatives
While unemployment deferment is one option, it’s not your only option. You may need to look for alternatives if:
If you need to look for alternatives to unemployment deferment, consider these three alternatives.
During the Covid-19 crisis, federal student loan payments are paused until Sept. 30, 2021. Interest isn’t accruing during this time, either. If you have federal loans, you don’t have to do anything to qualify.
If you need more time after the Covid-19 forbearance has lifted, you can apply for deferment or complete a general forbearance request. If you have private student loans, contact your lender about potential forbearance options.
Many lenders—including federal student loan servicers—offer economic hardship programs. This might work if you’re already receiving government benefits, have experienced an emergency or can detail another qualifying economic hardship. If you have a private student loan, you’ll need to contact your lender to see if you’re eligible.
Income-driven repayment plans base your payments on a percentage of your discretionary take-home pay and how many people live in your home. Depending on your plan, you’ll repay your loan for 20 or 25 years and complete annual forms to adjust for any pay changes.
You also can make changes throughout the year, like if you get a new job or a raise. If you lose your job, payments could be as low as $0 per month. IDR is generally a better option than deferment if student loan affordability is a long-term concern for you, rather than a short-term one.
If you’re struggling to make payments and you’re considering unemployment deferment, contact your lender to review your options. Regardless of whether you have federal or private student loans, most lenders will work with you based on your needs, as long as you take swift action.
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Loans WriterWith nearly two decades in journalism, Dori Zinn has covered loans and other personal finance topics for the better part of her career. She loves helping people learn about money, whether that’s preparing for retirement, saving for college, crafting a budget or starting to invest. Her work has been featured in the New York Times, Wall Street Journal, CNN, Yahoo, TIME, AP, CNET, New York Post and more.
Brianna McGurran is the Loans Analyst for Forbes Advisor. Most recently, she was a staff writer and spokesperson at NerdWallet, where she wrote "Ask Brianna," a financial advice column syndicated by the Associated Press. As spokesperson, she also contributed her expertise to outlets including The New York Times, ABC World News Tonight and the Today Show.
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