Can I defer my loan during a gap year?

I have student loans and am thinking about taking a gap year. Is it possible to defer these loans during that period, and what are the potential impacts on repayment later?

Yes, it's usually possible to defer your student loans during a gap year depending on the type of loans and the terms provided by your loan servicer.

For federal student loans, you're often entitled to a grace period of six months after leaving school before you have to start making repayments. If you plan to return to school after your gap year, you may be able to defer your payments throughout your gap year without having to make any repayments. You'll need to discuss with your loan servicer to make sure this applies to your situation.

Private student loans can be a bit more complicated. The deferment policy will likely depend on the terms of your specific lender. Many private lenders also offer some form of deferment while in school, but you may need to provide proof that you plan on returning to school once your gap year has ended.

Potential impacts when it comes to repayment later include accrued interest during your gap year. On subsidized federal loans, the government covers the interest during deferment. However, if you have unsubsidized federal loans or private loans, the interest could continue to accrue, increasing your total loan amount to be paid back.

Deferment can certainly give you some room to breathe during your gap year, but it's essential to understand how it will affect your loans in the long term. Be sure to speak with your loan servicer to understand all the implications before deciding to take this step.