How to Delay Student Loan Payments Until Graduation

Sage Crary
Sage Crary
Director of Financial Aid and Scholarships; pursuing an MS in Ethics and Religion

Is Student Loan Deferment Right for Me?

Sometimes people wonder if they can afford to go to graduate school while they are still paying on their undergraduate student loans. The good news is that you don’t always have to pay on them when your back in school (unless you want to!), so you shouldn’t have to worry!

How Long can I Defer Student Loans?

Fundamentally, there are two different types of loan categories, federal loans and private loans. Each one of these has slightly different rules when it comes to repayment options. For federal loans, as long as you are degree-seeking and enrolled at least half-time in your program, your federal loans will automatically be deferred. At the graduate level, ‘half-time’ status can mean different things based on how your program is designed. However, as a general rule of thumb, as long as you are taking two courses each term you are most often considered at least half-time. While you are in graduate school you can of course choose to continue to make payments on your undergraduate federal loans as well, but you won’t be required to.

How to Defer Your Private Student Loans

If you have private loans from your previous degree, those have a variety of different rules regarding in-school deferment options. In most cases they will follow similar rules as your federal loans, and you can defer them while you are enrolled at least half-time. However, not all private loans offer an in-school deferral option, and it certainly won’t be automatic if they do. You will need to consult directly with your loan company to find out the details for your particular loans and what the process is for requesting a deferral. In most cases they will have an online form to complete or a paper form for your new school to complete and submit to them on your behalf. This process is individual to your particular loan holder, so it’s best to inquire early so you know what their timelines are to ensure adequate time.

However, if you have the option of paying on any of your loans while you are in graduate school, you should always pay on your private loans rather than your federal loans. Private loans are often at higher interest rates than federal loans, and they cannot be consolidated the way your federal loans are, so these are always in your best interest to pay off first. Either way, it’s important to know that even if you choose to put your private loans in deferment for financial reasons while you go back to school, it’s always a better choice to go to graduate school. The increase in earning potential that a graduate degree provides always far exceeds the amount of interest you would have accrued had you chosen to pay your private loans off faster rather than going to graduate school.

When you come to the end of your graduate program and are completing your practicum, thesis, or final culminating experience, some schools do not consider you to be enrolled ‘at least half-time,’ so it’s a good idea to ask your advisor what your specific program defines as half-time in your final semesters. If you are not considered half-time, your federal and private loans will go back into repayment. In those cases, based on your economic status, you can still apply for a deferment for up to a total of twelve months; however, this will not be automatic, and you will need to contact your loan holders at that time.

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