Got Bills? Here’s When You Should Pause Student Loan Payments to Free Up Cash | Student Loans
Key Takeaways
- Deferment or forbearance can pause or reduce student loan payments during short-term financial hardship, but interest usually keeps accruing.
- If payments are continually unaffordable, income-driven repayment is better than pauses.
- Contact your student loan servicer before you miss a payment to have the most options.
Consumer prices were 3.5% higher in June 2026 than a year earlier, squeezing student loan borrowers already dealing with higher housing, grocery and utility costs. Payment pauses can help during a crisis, but experts say it’s a short-term tool and not a long-term strategy.
Deferment and forbearance can suspend or reduce payments during a hardship, whereas income-driven repayment adjusts student loan payments to make them more manageable long-term.
“Pausing payments should be used as a bridge, not a permanent strategy,” says Anthony Sozzo, New York Medical College director of student financial planning and student activities.
When Pausing Student Loan Payments Makes Sense
A student loan payment pause can be helpful when you have a temporary financial setback, so you don’t fall behind on necessities like housing, utilities, transportation and food. This temporary setback could be a job loss, medical bill, emergency repair or another issue that you expect to resolve within a few months.
If your budget is consistently short, or you’re charging necessities to credit cards so you can make loan payments, a payment pause won’t fix the problem. Your student loan payment would still be unaffordable after the pause, so taking a break from payments would only be helpful for a short while.
“A useful way to assess the situation is to ask whether the budget would recover within a few pay cycles without relying on additional borrowing,” says Bob McKay, president and certified credit union executive at Together Credit Union. “If not, a long-term adjustment is likely more appropriate.”
Understanding Deferment, Forbearance and Income-Driven Repayment
Deferment, forbearance and income-driven repayment can all change your student loan payment, but deferment and forbearance are temporary, while income-driven repayment is a long-term change.
Deferment and forbearance are intended to help student loan borrowers facing hardship, giving them time to resolve financial challenges and get back to making regular payments. Getting a student loan deferment postpones federal student loan payments, though interest generally accrues on unsubsidized loans and borrowers don’t make progress toward student loan forgiveness during a deferment.
Forbearance may be used to pause or reduce payments when a borrower doesn’t qualify for deferment, and interest accrues during the pause.
“If you are going through a financial pitfall, forbearance and deferment are often your best options, but keep in mind that interest on the loans is likely to continue accruing during the pause,” says Leslie H. Tayne, finance and debt expert and founder of Tayne Law Group.
She recommends thinking of income-driven repayment as a long-term solution more than a quick fix. Income-driven repayment adjusts your student loan monthly payments based on your income and household size. It can be useful when you’ve struggled with student loan payments for months and don’t expect them to get any easier.
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What a Student Loan Payment Pause Costs
Pausing student loan payments with deferment or forbearance can get you through a financial challenge, but they aren’t without drawbacks.
“Before postponing payments, borrowers should ask three questions,” says Sozzo. “Will interest accrue? Will this month count toward forgiveness? What will my payment look like when the pause ends?”
Consider these tradeoffs:
- Forbearance and most deferments don’t stop interest charges, so interest adds to your balance even when payments are paused.
- When the pause ends, your original payment comes back, which may still be unaffordable.
- The months spent in deferment or forbearance typically don’t count toward income-driven forgiveness or Public Service Loan Forgiveness.
An approved deferment or forbearance arranged with the student loan servicer shouldn’t hurt your credit, but missed payments can. If you skip payments before approval, those are missed payments. Generally, federal servicers report delinquency after a loan is 90 days past due.
When a Lower Payment Beats a Pause
If you can’t afford the current amount long-term, changing your payment amount is likely a smarter move.
“If a borrower can afford something, income-driven repayment is often better than pausing payments because it can help them stay on track, limit interest growth and continue progress toward forgiveness,” says Sozzo.
Your payment fluctuates with your income under income-driven repayment, which may make it more manageable. Making qualifying payments allows you to continue making progress toward income-driven repayment forgiveness or public service loan forgiveness.
Act Before You Miss a Payment
Don’t wait until you’ve missed a student loan payment to contact your servicer. Ask about income-driven repayment, deferment and forbearance and find out how each would affect interest, repayment and forgiveness progress.
Reaching out at the first sign of trouble may give you options you weren’t aware of, says Tayne. “The earlier you reach out, the more flexible the lender can be,” she says.
Tayne recommends continuing to make payments so a missed payment doesn’t affect your credit score, and says to avoid using credit cards or applying for a payday loan to make up the difference. “These high-interest options will likely trap you in a cycle of debt,” she warns.
