Major changes are coming to the federal student loan system, including new limits to deferment and forbearance programs. If you already borrowed federal student loans, you should remain eligible for the current protections. But if you borrow on or after July 1, 2027, you’ll face a smaller safety net if you lose your job or run into financial hardship. Find out what’s changing and who it affects so you can make informed decisions about your .
Major changes to deferment and forbearance will start July 1, 2027
Federal student loans are facing a major overhaul after the passage of the  in July 2025. Along with altering repayment plans and adjusting borrowing limits, this Act is changing the rules for deferment and forbearance.
Ìý²¹²Ô»åÌý are two protections that let borrowers postpone federal student loan payments if you run into financial hardship, go back to school, or have another qualifying reason. They’re often a last resort, since interest keeps accruing on most loan types while payments are paused.
However, they can be a lifeline if you’d otherwise miss payments and go into default. With the new rules, new borrowers with student loans issued on or after July 1, 2027 will face stricter rules around using deferment and forbearance.
- Deferment for unemployment and economic hardship is going away
| Category | Current deferment rules for federal student loans | New deferment rules for federal student loans disbursed on or after July 1, 2027 |
| Qualifying reasons | Unemployment, economic hardship, cancer treatment, graduate fellowship, in-school deferment, military service, rehabilitation training | No longer available for unemployment or economic hardship; other reasons still qualify |
| Interest accrual | No interest on subsidized loans, Perkins loans, or subsidized portion of consolidation loans; interest accrues on other loan types | Same rules apply |
| Time limits | Varies depending on type of deferment | Same limits apply |
Under the current system, you can defer student loan payments if you’re experiencing economic hardship, unemployment, or another eligible circumstance. If you qualify for economic hardship or unemployment deferment, you can pause your student loan payments for up to three years.
The new legislation eliminates deferment for unemployment and economic hardship for federal student loans issued on or after July 1, 2027. Existing loans should still be eligible, but if you borrow after that date, you can no longer defer loan payments if you lose your job or face financial trouble.
If you have subsidized student loans, interest won’t accrue on your loans while they’re in deferment. This benefit means your balance won’t grow while payments are paused. Interest does accrue on other loan types, like Direct unsubsidized loans and .
You can still use deferment for other reasons, such as going back to school, enrolling in a graduate fellowship program, undergoing treatment for cancer, or serving on active military duty.
- Forbearance timeframe will be shorter
| Category | Current forbearance rules for federal student loans | New forbearance rules for federal student loans disbursed on or after July 1, 2027 |
| Qualifying reasons – General forbearance | Financial difficulties, medical expenses, change in employment, or other acceptable reason | Same reasons apply |
| Qualifying reasons – Mandatory forbearance | AmeriCorps, Department of Defense student loan repayment program, medical or dental internship or residency, National Guard duty, student loan debt burden, Teacher Loan Forgiveness | Same reasons apply |
| Interest accrual | Interest accrues on all loan types | Same rules apply |
| Time limits | Up to 12 months at a time with cumulative limit of three years for general forbearance; up to 12 months at a time with no cumulative limit for mandatory forbearance | Limited to nine months within any 24-month period |
Forbearance, another option for postponing federal student loan payments, will also be more restricted for loans issued on or after July 1, 2027. Currently, there are two main types of forbearance:
- General forbearance: You can request this type of forbearance if you’re experiencing financial challenges, a change in employment, medical expenses, or another reason. It’s up to your loan servicer whether or not to grant your request.
- Mandatory forbearance:Â Your loan servicer is required to grant your forbearance request if you have an eligible reason, like serving in the National Guard, joining AmeriCorps, or working a medical or dental internship or residency.
For borrowers who already have a federal student loan, if you qualify for forbearance, you can pause your federal student loan payments for up to 12 months at a time. There’s a limit on general forbearances of three years, while mandatory forbearances can continue as long as you remain eligible.
Under the new rules, the amount of time that borrowers can use forbearance will shrink. Instead of 12 months, forbearances will be capped at nine months total within any 24-month period. This tighter cap will mean borrowers can no longer rely on forbearance for long-term financial relief.
Who will these changes impact?
These changes will impact future federal student loan borrowers, specifically those who take out loans after July 1, 2027. That may include undergraduates, graduate students, and parent borrowers planning for the 2027 to 2028 academic year or after.
If that includes you, you’ll face more restricted options for payment relief if you lose your job or experience financial challenges down the road. You may need to explore alternative options for  if you’re worried about falling behind.
If you already have federal student loans, you should retain access to the current forbearance and deferment protections. However, if you consolidate your loans after July 1, 2027, your new consolidation loan may be subject to the new rules.
What are some alternative ways to get student loan relief?
With upcoming restrictions to payment pause options, you may be wondering about alternative ways to get student loan relief. A couple options include:
- Forbearance instead of deferment: While new loans won’t qualify for deferment if you run into financial hardship or lose your job, you may still be granted a general forbearance by your loan servicer. The downsides are that general forbearance isn’t guaranteed and interest accrues across all loan types. Plus, the new timeframe will be restricted. However, pausing payments even for a short time may be what you need to get back on your feet and avoid delinquency.
- Income-driven repayment:Â Income-driven plans adjust your monthly payments in accordance with your income. Current options include PAYE, Income-Contingent Repayment (ICR), and Income-Based Repayment (IBR), though PAYE and ICR will be eliminated by mid-2028 or sooner. A new income-driven plan called the Repayment Assistance Plan (RAP) will also be available on July 1, 2026. Your monthly payments could be as low as $0 on the current plans or $10 on RAP, and you could eventually get your balance forgiven at the end of your repayment term.
You may also explore options for , such as the Teacher Loan Forgiveness or Public Service Loan Forgiveness programs.
Plan ahead for changing federal student loan rules
Deferment and forbearance provide a safety net during tough times If you already have federal student loans, you can use the same protections moving forward. But if you take out new loans or consolidate your federal student loans after July 2027, you’ll face fewer and more limited options for pausing your payments.
At any time, if you’re having a financial hardship or trouble making your monthly loan payments, you should reach out to your student loan servicer to discuss your options which may include deferment, forbearance, or adjusting your repayment plan.
Make sure to review your loan disbursement dates so you know which rules apply. By familiarizing yourself with the upcoming changes, you can plan ahead to protect your financial future.
