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How to Defer Your Student Loans – 5 Options to Extend or Postpone Paying Back School Loans


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When I was in college, every semester I received a check from the federal government for text books and living expenses (read: beer). I didn’t give much thought to how I was going to pay the student loans back until the day after graduation, when a bill for $12,000 landed in my mailbox.

In retrospect, I got off easy, as many college kids have more than $100,000 of student loans they need to repay. But whether you have a little or a lot, interest builds quickly, and it’s best to create a solid plan for paying back the debt that works with your financial situation.

What Are Your Options?

It’s virtually impossible to completely cancel your student loans unless you die or become permanently disabled (neither of which I recommend).

However, there are a few ways you can extend or postpone your payments for certain loans:

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  1. Deferment. Under certain conditions, your payments may be excused for a set period of time. The most common ways that your loans may be deferred are: if you go back to school, you’re having difficulty making payments due to unemployment, or you’re having other financial problems in your life. You generally will not be able to defer your loans if you have defaulted on previous payments.
  2. Forbearance. If you are facing personal problems in your life that could get in the way of your ability to repay your loans, the holder of your loan may allow you to stop making payments for a specified period of time. If you face medical or personal problems or can’t repay your loan in the maximum time frame, you may be able to qualify for forbearance on your federal loans.
  3. Extended Repayment Plan. On a standard repayment plan, you will be paying your loans back over the course of 10 years. If you have taken out more than $30,000 in student loans, you may be eligible to stretch your payments out over 25 years.
  4. Graduated Payment Plan. A graduated payment plan allows you to start off with lower payments in the early years, but those payments increase later on. This option is good for graduates who will be struggling right after college but expect to make a lot of money a couple years later.
  5. Income-Based Repayment Plan. Your loan may be adjusted based on your income, family obligations and the number of loans you have outstanding. This number will be reconfigured each year.

You will have to check with your lenders to see which options they allow. The Federal government generally is more forgiving than private lenders.

Delaying Your Payments Should Be a Last Resort

It is tempting to look for a loophole to take your time paying back your loans, but whenever possible you should try to pay them back as scheduled. Extended and graduated payment plans allow you to pay less each month, but in the long-term you can end up spending tens of thousands of dollars more due to interest. If you can afford it, consider paying your loans off faster than required. The faster you pay off your loans, the less interest will accumulate. If you use a repayment plan calculator, you will probably be surprised how much money you will save if you increase your monthly payment. Finally, look for private companies that will consolidate your student loans, if you have more than one. Using a peer-to-peer lending network like Lending Club might not be a bad idea in some cases either.

Final Word

Certain lenders will give you a lot of discretion as to how long you take repaying your student loans. You may be given the chance to take your time paying off your loans, but that doesn’t mean that you should take it. With interest rates where they are, delaying or suspending your payments can be a costly decision.

However, some people face certain life situations that may make it difficult or impossible to pay their loans off on time. If you are having a hard time getting a job or have become seriously ill, it is good to know that you may be able to get help. Make sure you check with your lender to see what your options are and how you should proceed.

Are you making progress paying off your student loans? Have you utilized any of the methods mentioned above? Share your thoughts and insights in a comment below.

Kalen Smith has written for a variety of financial and business sites. He is a weekly contributor for Young Entrepreneur and has worked as a guest blogger on behalf of Consumer Media Network. He holds an MBA in finance from Clark University in Worcester, MA.