Does Deferring Student Loans Affect Credit?

With the average student loan debt for 2017 graduates creeping up to $28,650 and the total student debt hitting $1.52 million and climbing, those big payments are budget busters for Millennials and Gen Xers alike. One option to delay paying your student loans debt is to take out a deferment. But how does deferring student loans affect credit?

The short answer is that it doesn’t. But there are still some things to be aware of when it comes to deferments, forbearances and your credit score.

What Is a Deferment?

A deferred student loan is a student loan that you put off making the payments on until a later time. Student loans are usually deferred while you’re still in school or if you go back to school at least part-time. Deferment can also be an option if you’re facing a financial problem, such as unemployment or significant debt, that makes it difficult to make your payments. These are typically handled by a loan servicer.

What Happens If You Defer Your Student Loans?

When you defer your student loans, you won’t have to make payments for as long as the deferment lasts. However, depending on the situation and the type of loan, the loan could be accruing interest while in deferment. This can increase the total loan amount substantially depending on the length of the deferment. Some loans—such as subsidized loans from the government—are eligible for interest-free deferments, which is the ideal situation for a deferment.

How Long Can You Defer Student Loans?

If you’re deferring because you are in school, the deferment can go on as long as you are enrolled at least part-time. However, a deferment because of financial hardship can only last up to three years. There are also some private loans that offer student loan deferment.

How Does Deferring Student Loans Affect Credit?

Deferring your student loans won’t affect your credit directly at all. A deferment will be listed in your credit report, but it’s not a negative or a positive thing when it comes to your credit score.

However, if your deferment is because of financial issues and you’ve already been late or missed some payments, those can affect your score negatively. This is why it’s important to apply for the deferment before the situation gets bad enough to not be able to make the payment.

What Is a Forbearance?

A forbearance is another way to be able to halt your student loan payments temporarily for up to a full year. Discretionary forbearances are just that—at the discretion of your lender—but mandatory forbearances must be granted by the lender if certain circumstances are met.

An example of criteria for a mandatory forbearance is if your student payment is more than 20% of your gross monthly income. So, if you make $3,000 gross per month and your payment is $660 a month, you would qualify for a mandatory forbearance from your lender.

How Does a Forbearance Affect Your Credit?

Getting a forbearance on your student loan won’t affect your credit score. It will show on your credit report that the student loan has been put in forbearance, but it doesn’t affect anything negatively. As long as you made your payments on time until the forbearance took effect and you start making payments again when the forbearance is over, your payments will be marked as current on your credit report.

Deferment vs. Forbearance

When it comes to choosing between deferment or forbearance, the big differences come down to the length of time and interest. A deferment can be taken out for a longer period than a forbearance, which can be helpful if you think it’s going to be longer than a year before you can start making regular payments again.

It’s also possible to end up not accruing interest during a deferment for the following types of loans.

  • Direct subsidized loans
  • Subsidized Federal Stafford loans
  • Federal Perkins loans
  • The subsidized part of direct consolidation loans
  • The subsidized part of FFEL consolidation loans

Loans in forbearance will collect interest the entire time no matter the loan type.

Which is Better—Deferment or Forbearance?

If you have loans that are eligible not to accrue interest during a deferment, the deferment is always the better option because it can save you quite a bit in added interest. However, a forbearance may be easier to qualify for, especially if you can meet the requirements for a mandatory forbearance.

If you’re wondering if a deferment affects your credit score or credit history, the answer is no. As long as you make all your payments on time before and after the deferment, it won’t affect your credit at all. Getting a deferment or forbearance can be a smart way to manage finances at times when your budget is just a little too tight. It can save you from resorting to making payments late or not at all and ruining your credit. receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them. Compensation is not a factor in the substantive evaluation of any product.

Hello, Reader!

Thanks for checking out We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline,, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of in general and they result in more traffic to us as well.

Our Business Model’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to are also able to register for a free account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Editorial Team