Loan deferment refers to a temporary period when a borrower is not required to make payments for an eligible reason. For Subsidized Stafford Loans, the interest that accrues on the loan during the deferment is paid by the federal government. For Unsubsidized Stafford Loans, the interest that accrues during a deferment must be paid by the borrower during or after the deferment period.

As a borrower under the federal loan program, you are entitled to a certain number of deferments of your monthly payment provided you meet the criteria and complete the appropriate documentation. One such example is if you became unemployed. You are entitled to unemployment deferments for a specific period of time. Another would be if you entered repayment and then went back to school at least half time in an eligible program, you would be eligible for an “In school” deferment.