Do I Have to Pay My Student Loans If I'm Unemployed?

Legal update: Under the One Big Beautiful Bill Act, which President Trump signed into law on July 4, 2025, borrowers who take out federal student loans after July 1, 2027, can't get a deferment based on economic hardship or unemployment. Also, for borrowers who take out loans on or after July 1, 2027, the One Big Beautiful Bill Act limits many forbearances to 9 months in any 24-month period. In addition, the Act eliminates several income-driven repayment plans (SAVE, PAYE, and ICR, see below). If you're currently enrolled in one of these plans, you have until July 1, 2028, to pick a new one from the following options: a standard repayment plan, the repayment assistance plan (RAP), the Income-Based Repayment (IBR) plan, or a graduated or extended repayment plan.

If you have federal student loans and lose your job, you can get apply for a deferment of up to three years (36 months). You'll have to meet certain eligibility criteria. During a deferment, you don't have to make any loan payments. In many cases, interest doesn't accrue during a deferment.

Another similar option is a forbearance. During a loan forbearance, your loan holder permits you to stop making payments for a while or temporarily make reduced payments. Different from a deferment, however, you'll eventually have to pay the interest that accrues during the forbearance.

If a deferment or forbearance doesn't work for you, you might be able to reduce your monthly payments by entering into one of the income-driven repayment options available for federal student loans.

Federal Student Loan Unemployment Deferment: What You Need to Know

A deferment allows you to temporarily postpone making student loan payments for a set amount of time.

When interest doesn't accrue during a deferment. If your loans are subsidized (which includes Federal Perkins loans, Direct Subsidized loans, Subsidized Federal Stafford loans, the subsidized portion of Direct Consolidation Loans, and the subsidized portion of FFEL Consolidation loans), you're not charged interest during the deferment.

When interest will accrue during a deferment. If you have unsubsidized loans, Direct PLUS loans, or FFEL PLUS loans, you'll have to pay the interest that accrues during the deferment period. In most cases, this interest is capitalized—that is, added to the principal balance—however, you can pay it during the deferment if you want.

You can find out specifically what type of loans you have at the U.S. Department of Education Federal Student Aid website.

Eligibility Criteria for Deferment

You can get a deferment for up to three years on your federal student loans if you're unemployed or unable to find full-time employment.

How to Get a Deferment of Federal Student Loans

To apply for a deferment of your federal student loans, contact your loan servicer. If you don't know who your loan servicer is, visit the U.S. Department of Education Federal Student Aid website. You can also get the application form online.

You don't have to pay a fee to apply for a deferment of your federal student loans.

Federal Student Loan Forbearances

If you don't qualify for deferment, you might be eligible for a forbearance for your federal student loans. A forbearance is another way to temporarily postpone loan payments or reduce the monthly payments. Unlike a deferment, interest will continue to be charged on all types of loans.

Income-Driven Repayment Plans: A Lifeline for Unemployed Borrowers

Another possibility is that you might be able to change your repayment plan to lower the monthly payment. Most federal student loans are eligible for at least one income-driven repayment plan, such as the Saving on a Valuable Education (SAVE) Plan, Income-Based Repayment Plan (IBR), Income Contingent Repayment Plan (ICR), or Pay As You Earn Repayment Plan (PAYE).

Keep Making Payments Until You Get the Deferment or Another Option

You need to keep making the monthly payments on your student loans until you're notified that you're approved for a deferment or another option. If you simply stop making payments on your student loan, you'll face some negative consequences, like a drop in your credit score, among other things. The servicer will probably report your loan as late to the credit reporting agencies once you're more than 90 days late with your payment.