Deferment & Forbearance Cost Calculator
The loan, and how long you would pause it
Your result will appear here
Fill in the fields on the left and this updates as you type.
Know what this estimate is based on
- Jurisdiction
- General mathematical model
- Scope and limitations
- Educational estimate only. Confirm the assumptions, current rules, fees, and rounding that apply to your situation before making a decision.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter the loan balance at the start of the pause and the interest rate. The example uses $32,000 at 6.52%.
- 02
Enter how many months you would pause payments. The example uses twelve.
- 03
Say whether this is a subsidized loan in a deferment, with 1 for yes and 0 for no. This is the one case where the government pays the interest, and it never applies in a forbearance. The example uses 0.
- 04
Say whether the unpaid interest capitalizes at the end, with 1 for yes and 0 for no. Capitalizing adds it to principal so you then pay interest on it. The example uses 1.
- 05
Enter the years of repayment left after the pause ends, then read the total the pause adds, the balance you restart on, how much the monthly payment rises, and what paying the interest during the pause would have saved.
Formula
Interest during the pause = balance x annual rate x months divided by 12. It is simple accrual on the principal, not compounding, because unpaid interest does not itself earn interest until it is capitalized. If the loan is a Direct Subsidized loan in a DEFERMENT, that figure is zero, because the government pays it (34 CFR 685.204(a)(1)). There is no subsidy in forbearance for any loan type. Balance when you restart = the original balance plus the accrued interest if it capitalizes (34 CFR 685.202(b)), or the original balance with the interest owed separately if it does not. Payment before = amortizing payment on the original balance over the remaining term. Payment after = amortizing payment on the post-capitalization balance over the same remaining term. Extra total cost = (payment after x remaining months, plus any interest owed but not capitalized) minus (payment before x remaining months). What paying interest during the pause saves = the extra total cost minus the accrued interest itself, which is exactly the interest-on-interest the capitalization would have created.
Example
A borrower with $32,000 at 6.52% pauses payments for twelve months on an unsubsidized loan, the interest capitalizes at the end, and fifteen years of repayment remain. Interest accrues at $173.87 a month, so $2,086 builds up across the pause. Capitalizing it takes the balance from $32,000 to $34,086, and the monthly payment for the remaining fifteen years rises from $279.11 to $297.30, an increase of $18.20. The pause therefore costs $3,276 in total: the $2,086 of interest, plus $1,189 of additional interest that the capitalized amount goes on to earn. Paying the interest as it accrued would have cost the same $2,086 but saved the whole $1,189, while still removing roughly $105 a month of pressure during the pause. Had this been a Direct Subsidized loan in a deferment rather than an unsubsidized loan, the accrued interest would have been zero and the pause would have cost nothing at all.
Definitions
- Deferment
- A pause in required payments granted on a specific ground such as unemployment, economic hardship, cancer treatment or enrolment in school. On a Direct Subsidized loan the government pays the interest during it.
- Forbearance
- A pause in required payments that is generally easier to obtain than a deferment and carries no interest subsidy for any loan type, including subsidized loans.
- Capitalization
- Adding unpaid accrued interest to the principal balance. From that point the added amount earns interest of its own, which is what makes a short pause expensive out of proportion to its length.
- Accrual
- Interest building up over time on the principal balance. It continues during a pause on any loan without an interest subsidy, whether or not any payment is being made.
- Interest-only payment
- Paying just the interest as it accrues during a pause, so the principal is untouched and nothing capitalizes. It is usually the cheapest way to take a pause, and most servicers will arrange it on request.
Good to know
Deferment and forbearance are not the same thing
The two words are used interchangeably in conversation and they are not interchangeable in law, with a difference that can be worth thousands of dollars. Both pause your required payments. Only one of them sometimes pauses the interest. Under 34 CFR 685.204, a borrower with a Direct Subsidized Loan or a Direct Subsidized Consolidation Loan who qualifies for a deferment need pay neither principal nor interest during it: the government covers the interest, and the balance you return to is the balance you left. A borrower with a Direct Unsubsidized Loan, an unsubsidized consolidation loan or a PLUS loan gets no such treatment even in a deferment. The regulation states plainly that for those loans principal need not be paid but interest does accrue and is either capitalized or paid by the borrower. Forbearance is simpler and worse. There is no interest subsidy in forbearance for any loan type at all, including subsidized loans. A subsidized borrower who takes a forbearance when they could have qualified for a deferment has given up the one benefit that made their loan subsidized in the first place. That makes the question of which one you are actually in a financially significant question, and the answer is not always obvious from a statement, since both appear as a pause. The example on this page shows the stakes. A $32,000 balance at 6.52% paused for twelve months accrues $2,086 of interest, at $173.87 a month. If that were a subsidized loan in a deferment, the figure would be zero. The practical advice is to ask your servicer, before the pause begins, two questions: is this being recorded as a deferment or a forbearance, and does the interest subsidy apply to my particular loans. Deferments generally require you to qualify on a specific ground, such as unemployment, economic hardship, cancer treatment or enrolment in school, and a borrower who qualifies for one should not accept a forbearance instead.
Capitalization, and why a short pause costs so much
Interest that accrues during a pause has to go somewhere, and the destination determines how expensive the pause turns out to be. If the interest is simply owed, it sits as interest: you pay it, and it earns nothing further. If it is capitalized, it is added to your principal balance, and from that moment it earns interest of its own. Capitalization is the mechanism that turns a modest sum into a large one. Under 34 CFR 685.202(b) the Secretary may add unpaid accrued interest to the principal balance, and for a loan not eligible for an interest subsidy during deferment the capitalization happens when the deferment expires. The example separates the two effects clearly. Twelve months of pause on $32,000 at 6.52% accrues $2,086. Capitalizing it takes the balance from $32,000 to $34,086 and raises the monthly payment from $279.11 to $297.30, an increase of $18.20 a month. Across the fifteen years of payments that remain, the total extra cost is $3,276. Note what that figure is made of: the $2,086 of interest itself, plus $1,189 of additional interest that the capitalized amount goes on to earn. Nearly a third of the cost of the pause is interest on interest. The longer the remaining term, the worse that proportion becomes, because the capitalized amount has more years in which to compound. This is why a pause taken early in a twenty-five year loan is far more expensive than the same pause taken in its final years, even though the headline interest figure is similar. It is also why the question of whether interest capitalizes is worth asking explicitly and getting in writing. Whether it happens depends on the type of pause and the type of loan, and the answer is not something to assume from a general rule you read somewhere. Your servicer can confirm both whether capitalization will occur and on what date.
Paying interest during the pause
There is a middle course between making full payments and paying nothing, and it is usually the best value available to someone who needs a pause. You take the deferment or forbearance, which relieves you of the principal portion of the payment, and you pay the interest as it accrues so that nothing is left to capitalize. The balance stays exactly where it was, and the pause costs you only the interest, with no compounding on top. In the example, paying the interest during the pause costs $2,086 spread across twelve months, or about $173.87 a month, and it saves $1,189 against letting the interest build and capitalize. The saving is the entire interest-on-interest component. You are still getting real relief: the required payment was $279.11 and you are paying $173.87, so roughly $105 a month of pressure has been removed while the debt itself is held perfectly still. Most servicers will accept interest-only payments during a pause if you ask, and many will tell you the exact monthly accrual on request so you can pay precisely the right amount. Some will set up a recurring interest-only payment for the duration. It is worth asking specifically for this rather than simply sending money, because an unexplained payment during a pause may be applied in a way you did not intend. A partial version of the same idea also works. If you cannot cover the full accrual, paying some of it reduces the amount that eventually capitalizes, and the saving scales accordingly. There is no requirement to pay all of it or none. The general principle is that during a pause the balance is the thing to protect: whatever keeps principal from growing is worth doing, because principal is what the remaining years of interest are calculated on. Ask your servicer what your monthly accrual is and whether they can bill it to you separately.
The alternatives to pausing at all
A pause is the right tool for a short, specific interruption and an expensive tool for a long-term shortfall, and the two situations are worth distinguishing before signing anything. If you are between jobs for three months, recovering from a medical episode, or moving across the country, a forbearance is a reasonable way to get through it, and the cost is contained because the period is short. If your income has fallen and is not expected to recover soon, repeatedly pausing is one of the most expensive routes available, and an income-based repayment plan is almost always better. The comparison is stark under the current rules. Under the Repayment Assistance Plan the payment falls with your income and cannot go below $10 a month, and crucially any interest the payment fails to cover is waived rather than added to your balance. That is the exact opposite of what a forbearance does. A borrower in genuine hardship on RAP sees their balance held down by the matching principal payment while they pay almost nothing; the same borrower in forbearance sees their balance climb every month and then jump when the interest capitalizes. Months spent in certain deferments, including economic hardship, also count as qualifying payments toward RAP's 360, whereas time in an ordinary forbearance generally does not advance you toward anything. There is one thing a pause does well that an income-based plan does not, and it should not be dismissed: it is immediate. A forbearance can often be arranged in a single phone call, where changing repayment plans requires an application and income documentation and takes time to process. Using a short forbearance to bridge the gap while an income-driven application is processed is a sensible use of the tool. What to avoid is drifting from one forbearance into another for years without ever making the application. Your servicer can tell you what an income-based payment would be before you commit to anything, and studentaid.gov lets you compare plans against your own loans.
Frequently asked questions
What is the difference between deferment and forbearance?
Both pause your required payments; only one sometimes pauses the interest. Under 34 CFR 685.204 a borrower with a Direct Subsidized loan in a deferment pays neither principal nor interest, because the government covers the interest. A borrower with an unsubsidized or PLUS loan pays no principal but interest still accrues. In a forbearance there is no interest subsidy for any loan type at all, including subsidized loans.
How much does a year's pause actually cost?
In the example, twelve months on a $32,000 balance at 6.52% accrues $2,086 of interest, at $173.87 a month. Capitalizing it takes the balance to $34,086, raises the payment from $279.11 to $297.30, and costs $3,276 in total across the fifteen years of payments that remain.
Why is the total cost more than the interest that accrued?
Because capitalization makes the interest earn interest. Of the $3,276 total in the example, $2,086 is the interest itself and $1,189 is the additional interest that the capitalized amount goes on to earn over the remaining term. Nearly a third of the cost of the pause is interest on interest.
Can I stop the interest from capitalizing?
Often, by paying the interest as it accrues during the pause. In the example that costs $2,086 spread across twelve months, about $173.87 a month, and saves $1,189. You still get real relief, because the required payment was $279.11 and you are paying $173.87. Most servicers accept interest-only payments during a pause if you ask for them specifically.
Does a partial payment help?
Yes, proportionally. There is no requirement to cover all of the accruing interest or none of it. Whatever you pay reduces the amount that eventually capitalizes, and the saving scales with it. During a pause the balance is the thing to protect, because principal is what all the remaining years of interest are calculated on.
Is a pause better or worse than an income-driven plan?
For a long-term shortfall, almost always worse. Under RAP the payment falls with your income to a floor of $10 a month, and interest the payment cannot cover is waived rather than added to the balance, which is the opposite of what a forbearance does. Months in certain deferments also count toward RAP's 360 qualifying payments, whereas ordinary forbearance generally advances you toward nothing.
So when is pausing the right answer?
For a short, specific interruption where the cost is contained: a few months between jobs, a medical episode, a move. A forbearance can often be arranged in one phone call, where changing repayment plans takes an application and time to process, so using a short forbearance to bridge the gap while an income-driven application is processed is sensible. What to avoid is drifting from one forbearance into another for years.