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There was a sharp increase in the number of student loan borrowers who press the pause button on their monthly bills.
The U.S. Department of Education offers two main ways to defer payments: deferrals and shelter.
A recent analysis by higher education expert Mark Kantrowitz shows that during these statuses, more than a quarter of more than 40 million federal student loan borrowers had stopped repayment progress in the third quarter. This is more than twice the number of such borrowers making payments in the same period in 2024.
Here’s what you need to know about these relief options and their possible outcomes:
Tools that defer payments can be “important”
According to consumer advocates, deferrals and tolerance can help student loan borrowers avoid the harsh consequences of falling behind on their bills.
“These tools for deferring payments are important to prevent borrowers who don’t have the ability to pay by default,” said Betsy Mayott, president of the Institute of Student Loan Advisors, which helps borrowers navigate debt repayments.
“Bigding occurs when it comes to the costs of credit scores, wages, tax refund decorations, and large collections added to the loan,” Mayotte added.
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Borrowers who cannot afford to pay the payment will explore options for suspending payments and could apply to the education department or loan servicers, she said.
Borrowers can avoid interest in postponement
The biggest difference between postponement and tolerance is whether you pay interest during a suspension of payment. During the postponement, the education department may not be interested in certain direct loans, a category that covers most federal student debt.
More specifically, the government does not usually charge interest to borrowers with subsidised loans during the postponement, Kantrowitz said.
As a result, if you are struggling to hold these loans and meet your bills, you should first consider whether you qualify for a deferral. Available postponements include postponing rehabilitation training for people enrolled in programs that provide “job, substance abuse, mental health, or alcohol abuse” treatments, postponing cancer treatments and postponing unemployment. (Borrowers who postponed cancer treatments will not charge interest regardless of whether their loans are subsidized or not.)
There is also postponement of financial difficulties for people who may receive public assistance or fall below certain income levels. Kantrowitz estimates that the number of borrowers during the economic difficulties postponed has doubled from 50,000 in the third quarter of 2024 to 100,000 in the third quarter of 2025.
Typically, there is a lifetime limit for unemployment and financial difficulties, he said.
Stopping costs
During so-called general tolerance, the education sector usually charges interest on any type of direct loan, the institution says. As a result, suspension of these payments can be costly. (For some reason, you can enter your tolerance.)
Typical federal student loan borrowers can see their debt increase by $219 per month on advantageous fees alone. (That assumes they owes an average unpaid federal student loan balance of around $39,000, with an average interest rate of around 6.7%.)
For some borrowers, these fees are better than the alternatives, Mayotto said, “it’s better than defaulting past the loan.”
Currently, borrowers may be in general tolerance for up to three years of their loan life, but the recent law changes the limit to nine months every 24 months as of July 1, 2027.
In any case, it’s not a long-term strategy.
Nancy Nearman, assistant director of New York’s Education Debt Consumer Assistance Program, said postponements and repetition were “not a long-term strategy to eliminate debt.”
Deferring the invoice can provide temporary relief, but borrowers are always better off finding ways to repay affordable debts.
Some income-driven repayment plans, or IDRs, cap your bills to a percentage of your income. They can also advance towards loan waiver under the IDR plan. That momentum is often stopped during tolerance or postponement.
“Too much time spent on tolerance and postponement means it takes time to get rid of debt,” Nierman said.
