Student Loans: Cancellation, Deferment, and Forbearance

If you’re having trouble keeping up with the payments on one or more of your federal student loans, eliminating the debt through loan cancellation is probably an ideal solution to your problem. But canceling a loan is available only in very limited circumstances.

Instead, if you’re not eligible for cancellation, you might be able to get temporary relief from making payments with a deferment or forbearance. Of these two options, getting a deferment of your federal student loans is generally better than forbearance—if you’re eligible. With a deferment, the government picks up the tab for interest on subsidized loans during a deferment period, which makes this route cheaper for most people.

Canceling Federal Student Loans

In certain limited circumstances, you might be able to cancel your student loan debt—meaning you don’t have to repay it. Getting a loan canceled isn’t easy; you’ll have to meet specific criteria, take certain steps, and meet particular conditions.

Loan cancellation—also called loan discharge or forgiveness—is available in instances like the following:

• you attended a school that closed
• you didn't get a refund where appropriate
• your school falsely certified that you would benefit from the education and you don't have a GED or high school diploma
• you attended a Corinthian College or were defrauded by another school
• you work in certain occupations after graduation, like teaching or some public service jobs, and
• you’re disabled or die.

To learn more about student loan cancellation, see Student Loan Forgiveness: What It Is, How It Works, and How to Qualify.

Deferring Your Federal Student Loans

A deferment excuses you from making student loan payments for a set period of time because of a specific condition in your life—like returning to school, economic hardship, or unemployment. Interest will not accrue on subsidized loans during the deferment period.

You can generally defer repayment of a federal student loan if:

• you meet specific criteria and conditions for your type of loan, and
• you’re not more than 270 days behind (in default) in loan payments.

Common Types of Deferments

You might be eligible for a deferment on your federal student loans if you're:

• enrolled in school at least half-time
• enrolled in an approved graduate fellowship program
• a parent who received a Direct PLUS Loan or a FFEL PLUS Loan, and the student for whom you obtained the loan is enrolled at least half-time at an eligible college or career school (and for an additional six months after the student ceases to be enrolled at least half-time)
• unemployed and seeking employment
• suffering economic hardship
• serving in the military on active duty in connection with a war, military operation, or national emergency (or served within the past 13 months)
• disabled and in a rehabilitation program
• receiving treatment for cancer (and for six months after that), or
• serving in the Peace Corps.

Getting a Forbearance

In a forbearance, you stop making payments—or make smaller payments—for a set amount of time. Interest continues to accrue on all types of federal student loans during a forbearance. So, the total amount you’ll have repay over the life of your loan will usually be higher.

Forbearance on federal student loans may be granted for a number of reasons, including:

• financial problems
• medical expenses
• a change in your employment, or
• another reason that's acceptable to your loan servicer.

In some situations, your loan servicer decides whether to grant your request for a forbearance. But in others—like if you’re serving in an AmeriCorps position for which you received a national service award or performing teaching service that would qualify you for teacher loan forgiveness (Direct Loans and FFEL Program loans only)—forbearance is mandatory. (To learn more about deferment and forbearance, see What's the Difference Between Student Loan Forbearance and Deferment?)

Other Options: Changing Repayment Plans and Consolidation

In addition to considering deferment and forbearance, it’s a good idea to think about changing your repayment plan and considering a Direct Consolidation Loan.

Changing Repayment Plans

If you’re having trouble making your student loan payments, you might also consider the different repayment plans that the Department of Education offers for federal student loans. For more information, see Student Loan Repayment Plans and How to Choose a Student Loan Repayment Plan.

Consider Student Loan Consolidation

If you have multiple student loans, you might be able to lower your monthly payment with a Direct Consolidation Loan. A Direct Consolidation Loan allows you to combine all your federal student loans into one loan for one monthly payment. (Learn more about federal Direct Consolidation loans, see Student Loan Consolidation: Federal Student Loans, Private Student Loans.)

Getting More Information

To learn more about getting a loan cancellation, deferment, or forbearance, go to the U.S. Department of Education’s Federal Student Aid website. To apply for any of the options discussed in this article, contact your loan servicer.