What is the difference between deferment and forbearance?

Deferment and forbearance both pause student loan payments, but deferment is generally better because the government pays your subsidized loan interest during deferment, while interest accrues on all loans during forbearance.

Which is better for a student loan deferment or forbearance?

Deferment is better because you avoid accruing interest on subsidized federal loans, whereas forbearance always accrues interest on every loan type, increasing your total repayment amount significantly over time.

Does deferment or forbearance cost more money?

Forbearance costs more because unpaid interest capitalizes and gets added to your principal balance, meaning you later pay interest on the interest you already owed.

Is forbearance safe for your credit score?

Yes, forbearance is safe for your credit score because your account remains in good standing and is reported as current, provided you made all required payments before the pause began.

Can I switch from forbearance to deferment?

Yes, you can switch from forbearance to deferment by contacting your loan servicer and applying for a deferment, which requires meeting specific eligibility criteria like economic hardship or school enrollment.

Is deferment and forbearance the same thing?

No, deferment and forbearance are not the same because deferment may qualify for interest subsidies on certain federal loans, while forbearance always charges interest on the entire loan balance.

What is a common mistake with deferment and forbearance?

A common mistake is choosing forbearance without checking deferment eligibility, which costs borrowers thousands in unnecessary capitalized interest that could have been avoided through a subsidized deferment option.

What is deferment used for in real life?

Deferment is used for specific situations like returning to school, unemployment, or military service, where you qualify for a pause and possibly receive interest subsidies on your federal student loans.

Which loan types qualify for deferment versus forbearance?

Deferment qualifies for federal student loans with specific conditions like economic hardship, while forbearance qualifies for almost any federal loan type, including those with private lenders and defaulted loans.

Is deferment or forbearance better for private student loans?

Forbearance is typically your only option for private student loans because private lenders rarely offer deferment, and any payment pause through forbearance will always accrue interest on your entire balance.

Difference Between

Difference Between Deferment and Forbearance

Written byNex Virox Team

Editorial Team

Reviewed byVarshal Nirbhavane

Senior SEO & Organic Growth Professional · 5+ years

Published: August 28, 202619 min read

Quick answer

The main difference between Deferment and Forbearance is that deferment temporarily pauses loan payments, often without accruing interest on subsidized federal loans, while forbearance pauses or reduces payments but interest continues to accrue on all loan types.

Key takeaways

Core distinction: Deferment pauses loan payments, often with interest subsidies, while forbearance merely postpones payments.
How each works: Deferment may stop interest accrual on subsidized federal loans, but forbearance always lets interest accumulate continuously.
Cost comparison: Forbearance costs more because unpaid interest capitalizes, increasing your total loan balance and future monthly payments.
Best-fit use: Choose deferment for qualifying hardships like unemployment, and forbearance for short-term shortfalls or medical expenses.
Common mistake: Borrowers wrongly assume both options stop interest, yet forbearance grows debt while deferment may not.

Table of Contents18 sections

Difference Between Deferment and Forbearance: Comparison Table

Aspect	Deferment	Forbearance
Definition	A temporary pause in loan payments where interest does not accrue on subsidized federal loans.	A temporary pause or reduction in payments where interest continues to accrue on all loan types.
Purpose	Provides relief for specific qualifying events like returning to school, unemployment, or military service.	Provides general relief for financial hardship when the borrower cannot make scheduled payments.
Core Mechanism	Stops the payment obligation entirely for a defined period, with no interest growth on subsidized loans.	Stops or reduces payments but never stops interest from accruing on every loan type.
Eligibility Criteria	Requires documented proof of a qualifying event, such as enrollment in a graduate program.	Requires a general financial hardship explanation, often with less stringent documentation than deferment.
Interest Accrual	Interest does not accrue on subsidized federal loans during the deferment period.	Interest accrues on all loans, including subsidized ones, during the forbearance period.
Capitalization	Unpaid interest may capitalize at the end of the deferment period for unsubsidized loans.	Unpaid interest capitalizes at the end of the forbearance, increasing the principal balance.
Loan Types	Applies to federal student loans, including Direct Subsidized and Unsubsidized Loans.	Applies to federal and private student loans, plus some other consumer debts.
Duration Limit	Typically lasts up to 36 months for economic hardship deferment, with some types having no limit.	Typically granted for 12 months at a time, often capped at 36 months total per loan.
Application Process	Requires a formal application form and supporting documentation submitted to the loan servicer.	Requires a request to the servicer, often approved with a simple verbal or written request.
Subsidy Benefit	The government pays the interest on subsidized loans during the deferment period.	The government never pays interest on any loan during the forbearance period.
Approval Time	Approval can take several weeks while the servicer verifies the qualifying event.	Approval is often immediate or granted within a few business days of the request.
Qualifying Events	Includes cancer treatment, economic hardship, graduate fellowship, and military service.	Includes general financial hardship, medical expenses, or other temporary income loss.
Interest Rate	Interest rate remains fixed at the original rate during the deferment period.	Interest rate remains fixed at the original rate, but the accruing interest adds cost.
Total Cost Impact	Deferment on subsidized loans costs nothing extra because interest is paid by the government.	Forbearance always increases the total repayment cost because interest accrues daily.
Payment Amount	Required payment is exactly zero dollars per month during the deferment period.	Required payment is zero dollars or a reduced amount, often set by the servicer.
Credit Reporting	Deferment status is reported to credit bureaus as a normal, non-delinquent status.	Forbearance status is reported as a non-delinquent status, but it is visible to lenders.
Default Risk	Prevents default entirely because the payment obligation is legally suspended.	Prevents default during the period, but the accrued interest raises future risk.
Documentation	Requires official proof like enrollment verification or military orders for approval.	Requires a simple financial statement or verbal explanation of hardship.
Private Loans	Deferment is rarely offered on private student loans, and terms vary by lender.	Forbearance is the primary relief option for private student loan borrowers.
Servicer Discretion	Deferment is a legal right when a qualifying event is proven and documented.	Forbearance is often granted at the servicer's discretion based on policy.
Appeal Option	Denied deferment applications can be appealed with additional supporting evidence.	Denied forbearance requests can be appealed, but approval is not guaranteed.
Post-Event Status	Payments resume at the original schedule after the deferment period ends.	Payments resume, but the capitalized interest may create a new, higher payment amount.
Tax Implications	Deferment has no direct tax impact, but forgiven interest is not taxable.	Forbearance has no direct tax impact, but capitalized interest increases debt.
Public Service	Deferment counts toward Public Service Loan Forgiveness for qualifying employment.	Forbearance generally does not count toward Public Service Loan Forgiveness.
Income Driven	Deferment is separate from income-driven repayment plans and does not replace them.	Forbearance is a temporary tool, unlike income-driven plans which are long-term.
Consumer Debt	Deferment applies to federal student loans, not credit cards or auto loans.	Forbearance applies to student loans, mortgages, and some other consumer debts.
Typical Users	Students returning to school or military members on active duty use deferment.	Borrowers facing temporary unemployment or unexpected medical bills use forbearance.
Main Limitation	Deferment requires a qualifying event, so it is not available for simple financial stress.	Forbearance is available for any hardship, but it always costs more in the long run.
Best Fit Scenario	Best for borrowers with a clear, documented event like graduate school enrollment.	Best for short-term cash flow emergencies when no other relief option qualifies.
Strategic Choice	Choose deferment first when eligible because it avoids interest on subsidized loans.	Choose forbearance only after exhausting deferment and income-driven options.

What Is Deferment?

Deferment is a temporary pause on federal student loan payments that pauses principal and interest for qualifying borrowers. It exists to provide financial relief during specific hardships like graduate school enrollment or unemployment. Interest does not accrue on subsidized loans during this period.

Definition of Deferment

Deferment is a formal agreement that suspends required loan payments for a defined eligibility period. During this time, the federal government pays interest on subsidized federal loans. Borrowers must apply through their loan servicer with documented proof of their qualifying circumstance.

Key Characteristics of Deferment

Characteristic	What It Means in Practice
Interest Subsidy Benefit	Government pays accruing interest on subsidized loans during the deferment period.
Application Required	Borrowers must submit documentation proving eligibility to the loan servicer.
Specific Qualifying Events	Enrollment in school, unemployment, or economic hardship qualifies for deferment.
Limited Time Duration	Each deferment type has a maximum allowable period, often three years.
Unsubsidized Loan Interest	Interest continues accruing on unsubsidized loans and gets added to principal.
Servicer Approval Process	Loan servicer reviews application and determines approval or denial status.
Retroactive Application	Borrowers can request deferment backdating for up to six months.
No Payment Obligation	Borrower has zero required monthly payment during the active deferment period.
Credit Reporting Effect	Deferment status reported as current and never marks the account delinquent.
Ends Automatically	Deferment concludes when the qualifying event ends or time expires.

Common Examples of Deferment

Graduate School Enrollment – enrolled at least half-time in an eligible graduate program defers loans.
Cancer Treatment – actively undergoing treatment for cancer pauses payments during treatment.
Peace Corps Service – serving full-time in the Peace Corps qualifies for deferment.
Economic Hardship – receiving public assistance or earning below federal poverty level qualifies.
Unemployment Period – receiving unemployment benefits or actively seeking full-time work qualifies.
Military Service – serving on active duty during a war or national emergency qualifies.
Teacher Service – teaching in a designated teacher shortage area defers Perkins loans.
Post-Active Duty – recent veterans within 13 months post-discharge period from active duty.
Rehabilitation Training – participating in a rehabilitation training program for disabled individuals qualifies.
Disability Discharge – serving in the National Guard during a federal active duty call.

Advantages and Limitations of Deferment

Advantages	Limitations
Government pays interest on subsidized loans during the entire deferment period.	Unsubsidized loan interest accrues daily and capitalizes onto the principal balance.
No payment is required so borrowers avoid delinquency and credit damage.	Strict eligibility criteria excludes most borrowers who do not meet requirements.
Deferment keeps loan status current on credit reports as paid status.	Application paperwork and proof requirements create a significant administrative burden.
Borrowers can extend total repayment timeline by deferring payment obligations.	Maximum deferment duration is capped, leaving long-term hardship unresolved entirely.
Subsidized loans avoid interest growth while enrolled in school programs.	Loan balance grows substantially through interest capitalization on unsubsidized loans.
Borrowers avoid default and default-related collection fees during deferment.	Deferment does not reduce principal, so total repayment cost increases overall.
Qualifying events include unemployment, school, and military service coverage.	Borrowers must reapply repeatedly for each new deferment period request.
Retroactive deferment can remove past delinquency from a borrower's record.	Denied applications waste time while interest accrues during the waiting process.
Deferment provides legal protection from forced collection and collection actions.	Private student loans rarely offer deferment, unlike federal student loan programs.
Borrowers maintain eligibility for loan forgiveness programs during deferment.	Deferment delays financial independence and extends overall debt repayment duration.

What Is Forbearance?

Forbearance is a temporary pause or reduction of loan payments granted by a lender when a borrower faces financial hardship. It allows temporary relief from making full payments, but interest typically continues to accrue, increasing the total amount owed.

Definition of Forbearance

Forbearance is a formal agreement between a borrower and lender that temporarily suspends or reduces required loan payments for a set period. Unlike cancellation, forbearance postpones payments temporarily, and any unpaid interest is often capitalized, meaning it is added to the principal balance after the forbearance period ends.

Key Characteristics of Forbearance

Characteristic	What It Means in Practice
Temporary relief	Payments pause or reduce for a defined period, typically 3 to 12 months, then must resume.
Interest accrual	Interest keeps building on the outstanding balance throughout the forbearance period without stopping.
Capitalization risk	Unpaid interest gets added to the principal, which increases the total future monthly payment.
Borrower-initiated	The borrower must request forbearance and prove financial hardship to the lender.
Lender approval	The lender has final authority to approve or deny a forbearance request.
Credit impact	Forbearance itself is not reported as a missed payment, so credit score damage is limited.
Documentation needed	Borrowers provide proof of hardship, such as medical bills, job loss, or disaster damage.
No principal reduction	The loan principal amount remains unchanged during forbearance, and the debt is not forgiven.
Payment resumption	Regular payments restart at the end of the forbearance term, often at a higher amount.
Program specific	Terms vary by loan type, such as federal student loans, mortgages, or private lenders.

Common Examples of Forbearance

Federal student loan forbearance – offered by the U.S. Department of Education for borrowers facing financial hardship or medical expenses.
Mortgage forbearance – provided by major U.S. banks and servicers after natural disasters, like hurricanes, to prevent foreclosure.
COVID-19 pandemic forbearance – a nationwide relief program that paused mortgage payments for millions of homeowners during 2020.
Medical hardship forbearance – granted when a borrower faces serious illness or disability that prevents regular employment.
Disaster relief forbearance – activated for homeowners in federally declared disaster zones, such as wildfire or flood areas.
Private student loan forbearance – offered by private lenders like Sallie Mae or Navient for temporary payment relief.
General forbearance – a discretionary option for federal student loan borrowers with financial difficulties not covered elsewhere.
Mandatory forbearance – required by law for certain situations, such as a medical residency or national service.
Auto loan forbearance – granted by lenders like Ally or Wells Fargo for temporary financial setbacks like job loss.
Personal loan forbearance – provided by online lenders, such as SoFi or Marcus, for borrowers facing short-term cash flow issues.

Advantages and Limitations of Forbearance

Advantages	Limitations
Prevents immediate default and avoids the severe consequences of a missed payment.	Interest continues to accrue, meaning borrowers owe significantly more when forbearance ends.
Provides immediate breathing room to recover from temporary financial shocks like job loss.	Capitalized interest increases the principal, leading to permanently higher total interest costs.
Helps avoid foreclosure on a home, protecting the borrower's largest asset from loss.	Does not reduce or forgive any portion of the underlying loan balance at all.
Can be easier to qualify for than some other relief options, depending on the lender.	Monthly payments after forbearance often increase, sometimes dramatically, due to added interest.
Offers a structured, documented plan rather than leaving the borrower in a vague status.	Extends the overall loan term, meaning the borrower stays in debt for a longer period.
May be available for various loan types, including federal, private, and mortgage loans.	Not a long-term solution and fails to address permanent financial hardship if it persists.
Provides a formal agreement that clearly states the terms of the payment pause.	Requires proactive application and proof, which can be stressful during a crisis.
Typically does not directly damage a borrower's credit score as a missed payment.	Can still be reported to credit bureaus, which may affect future credit applications.
Offers flexibility in duration, with options ranging from a few months up to a year.	Often requires a lump-sum payment of all missed amounts at the end of forbearance.
Can be used as a short-term bridge while a borrower pursues a more permanent plan.	May not be available for all loan types, and some private lenders do not offer it.

Similarities Between Deferment and Forbearance

Shared Aspect	How Deferment and Forbearance Are Alike
Primary Purpose	Deferment and forbearance both temporarily pause or reduce a borrower's monthly student loan payments.
Loan Category	Deferment and forbearance both apply exclusively to federal student loans from the U.S. Department of Education.
Borrower Profile	Deferment and forbearance both serve borrowers facing temporary financial hardship or a specific qualifying life event.
Application Process	Deferment and forbearance both require the borrower to submit a formal request to their loan servicer.
Documentation Input	Deferment and forbearance both typically require supporting documents like forms, tax returns, or proof of eligibility.
Servicer Role	Deferment and forbearance both depend on the loan servicer to review, approve, and process the request.
Payment Output	Deferment and forbearance both result in reduced monthly payments or a complete suspension of required payments.
Interest Accrual	Deferment and forbearance both often allow interest to accrue on most loan types during the relief period.
Loan Balance	Deferment and forbearance both can increase the total loan balance because unpaid interest gets capitalized.
Capitalization Effect	Deferment and forbearance both may add unpaid interest to the principal balance after the relief period ends.
Time Duration	Deferment and forbearance both provide relief for a limited, specified period rather than permanent loan forgiveness.
Maximum Limit	Deferment and forbearance both have a maximum allowable duration capped at a specific number of months.
Eligibility Rules	Deferment and forbearance both require the borrower to meet specific federal eligibility criteria before approval.
Qualifying Events	Deferment and forbearance both cover hardship, unemployment, economic hardship, enrollment, or military service situations.
Borrower Benefit	Deferment and forbearance both protect the borrower from default while the borrower is unable to pay.
Default Prevention	Deferment and forbearance both help the borrower avoid falling into a delinquent or default status.
Credit Reporting	Deferment and forbearance both keep the loan current and prevent negative credit score damage from missed payments.
Collection Action	Deferment and forbearance both stop collection calls, collection calls, and wage garnishment actions from collectors.
Loan Status	Deferment and forbearance both keep the loan in a current status rather than a delinquent status.
Payment Schedule	Deferment and forbearance both temporarily alter the original repayment schedule and the monthly due date.
Financial Relief	Deferment and forbearance both provide immediate financial relief to the borrower during a cash-flow crisis.
Borrower Choice	Deferment and forbearance both require the borrower to actively choose and request this relief option.
Financial Hardship	Deferment and forbearance both address genuine financial hardship rather than simple personal financial preference.
Government Program	Deferment and forbearance both operate under the federal student aid program and its regulations.
Regulatory Standard	Deferment and forbearance both follow rules set by the U.S. Department of Education for federal loans.
Servicer Contact	Deferment and forbearance both require the borrower to contact and work with the assigned loan servicer.
Application Form	Deferment and forbearance both use a specific application form provided by the loan servicer.
Approval Decision	Deferment and forbearance both depend on the servicer's final approval decision based on the submitted documentation.
Long-Term Cost	Deferment and forbearance both increase the total long-term repayment cost due to added accrued interest.
Repayment Outcome	Deferment and forbearance both ultimately require the borrower to resume regular payments after the relief period.

Deferment or Forbearance: Which Should You Choose?

For most borrowers, the deciding variable is whether your loan type qualifies for deferment, because deferment pauses interest on subsidized federal loans while forbearance always accrues it. If you qualify for deferment, choose it. If you do not qualify, forbearance remains your only option.

Choose Deferment when

Choose Deferment when you experience unemployment, active military service, or graduate school enrollment. It also applies to economic hardship or Peace Corps service. This option works best for subsidized federal loans because the government pays your interest during the pause, preventing your balance from growing.

Choose Forbearance when

Choose Forbearance when you face medical bills, medical residency, or unexpected expenses that deferment does not cover. It suits private loans or unsubsidized federal loans where interest accrues regardless. This option provides immediate relief when you lack deferment-qualifying status but still need temporary payment relief.

Common Misconceptions About Deferment and Forbearance

Common Myth	The Reality
Deferment and forbearance are the exact same thing with different names.	Deferment pauses payments while interest often stops accruing on subsidized federal loans, but forbearance always continues accruing interest on every loan type.
You must prove a hardship to qualify for any deferment option.	Deferment requires specific qualifying events like enrollment or unemployment, while forbearance is granted for broader financial hardship without those strict categories.
Interest never accrues during any type of student loan pause.	Forbearance always accrues interest on all loan types, and unsubsidized deferment also accrues interest; only subsidized deferment pauses interest on subsidized loans.
Forbearance is always the better choice for every borrower.	Deferment is better for subsidized loans because interest stops accruing, while forbearance is better only when you lack qualifying deferment events.
You can pause payments indefinitely for as long as you need.	Deferment typically lasts up to three years, while forbearance usually caps at twelve months before you must reapply for another period.
Applying for deferment requires a simple phone call to your servicer.	Deferment requires documented proof of eligibility like enrollment certificates, while forbearance often only needs a verbal request for general hardship.
Private student loans offer identical deferment benefits as federal loans.	Private lenders rarely offer deferment, while forbearance is the common private option, and terms vary drastically between different lenders.
Unpaid interest during forbearance gets forgiven after the pause ends.	Unpaid interest during forbearance capitalizes and gets added to your principal balance, which increases your total loan balance permanently.
Subsidized loan deferment always prevents interest from growing.	Deferment stops interest only on subsidized loans, while unsubsidized loans in deferment still accrue interest that you must eventually pay.
Forbearance counts toward Public Service Loan Forgiveness eligibility.	Forbearance periods generally do not count as qualifying payments for PSLF, while deferment also fails to count toward the 120 qualifying payments.
You can choose deferment over forbearance for any financial hardship.	Deferment requires specific qualifying events, while forbearance accepts any financial hardship, so you cannot simply elect deferment without eligibility.
Forbearance stops your interest from growing on all loans.	Forbearance never stops interest accrual on any loan type, while deferment stops interest only on subsidized federal loans during the pause period.
Deferment and forbearance both pause payments automatically when unemployed.	Unemployment deferment requires applying with your servicer, while forbearance also requires a formal request, and neither pauses automatically without your application.
Interest capitalization works identically after deferment and forbearance periods.	Unpaid interest capitalizes after both deferment and forbearance, but deferment on subsidized loans avoids that capitalization because interest never accrues.
You can use forbearance repeatedly without any maximum time limits.	Forbearance generally caps at twelve consecutive months, while deferment allows up to three years total, and both require new applications for extensions.
Your credit score drops immediately when you enter deferment or forbearance.	Deferment and forbearance do not directly damage credit scores, while missed payments that are unreported as current do not appear as delinquent.
Graduate students get the same deferment benefits as undergraduate students.	Graduate students often lack subsidized loan deferment benefits, while forbearance treats graduate and undergraduate loans identically with interest always accruing.
Forbearance requires proving you cannot afford payments with documents.	General forbearance often requires no documentation, while deferment requires proof of your qualifying event like unemployment or enrollment documentation.
Deferment always pauses interest on every federal loan type.	Deferment pauses interest only on subsidized loans, while unsubsidized loans in deferment accrue interest that you must pay after the deferment period.
You can switch from deferment to forbearance without any penalty.	Switching from deferment to forbearance is allowed, but forbearance always accrues interest, while deferment may stop interest on subsidized loans.
Forbearance is only available for federal student loan borrowers.	Forbearance is available on federal loans and many private loans, while deferment is mostly federal, but private lenders offer their own forbearance options.
Deferment and forbearance both pause interest on parent PLUS loans.	Parent PLUS loans in deferment still accrue interest because they are unsubsidized, while forbearance also accrues interest on every PLUS loan.
Your loan servicer automatically applies deferment when you request forbearance.	Deferment requires you to apply and prove eligibility, while forbearance requires a request, but servicers never automatically apply either without your application.
Forbearance is permanent relief that erases your monthly payment obligation.	Forbearance is temporary relief that pauses payments, while deferment also ends eventually, and both require resuming full monthly payments afterward.
Deferment is always interest-free for every type of borrower.	Deferment is interest-free only on subsidized subsidized loans, while unsubsidized loans in deferment accrue interest just like forbearance does.
You can request forbearance for school enrollment like deferment.	Deferment covers enrollment in school at least half-time, while forbearance does not cover school enrollment because enrollment qualifies only for deferment.
Both options equally protect your total loan balance from growing.	Deferment on subsidized loans prevents balance growth, while forbearance always grows your balance through interest capitalization and accrual.
Forbearance requires a qualifying event like deferment does.	Forbearance does not require specific qualifying events, while deferment demands documented events like unemployment, economic hardship, or military service.
Deferment and forbearance are only for federal student loans.	Deferment and forbearance apply to federal student loans, while private loans may offer forbearance, but private deferment is rare and varies.
You lose all repayment progress by choosing either deferment or forbearance.	Deferment and forbearance pause payments, but neither resets your loan term, while interest capitalization can increase your remaining balance after resuming.

Conclusion

Difference Between Deferment and Forbearance comes down to interest accrual. Deferment pauses payments without interest accruing on subsidized loans; forbearance always accrues interest. Choose deferment when eligible for subsidies. Choose forbearance when ineligible but needing temporary relief.

FAQs on Difference Between Deferment and Forbearance

What is the difference between deferment and forbearance?: Deferment and forbearance both pause student loan payments, but deferment is generally better because the government pays your subsidized loan interest during deferment, while interest accrues on all loans during forbearance.
Which is better for a student loan deferment or forbearance?: Deferment is better because you avoid accruing interest on subsidized federal loans, whereas forbearance always accrues interest on every loan type, increasing your total repayment amount significantly over time.
Does deferment or forbearance cost more money?: Forbearance costs more because unpaid interest capitalizes and gets added to your principal balance, meaning you later pay interest on the interest you already owed.
Is forbearance safe for your credit score?: Yes, forbearance is safe for your credit score because your account remains in good standing and is reported as current, provided you made all required payments before the pause began.
Can I switch from forbearance to deferment?: Yes, you can switch from forbearance to deferment by contacting your loan servicer and applying for a deferment, which requires meeting specific eligibility criteria like economic hardship or school enrollment.
Is deferment and forbearance the same thing?: No, deferment and forbearance are not the same because deferment may qualify for interest subsidies on certain federal loans, while forbearance always charges interest on the entire loan balance.
What is a common mistake with deferment and forbearance?: A common mistake is choosing forbearance without checking deferment eligibility, which costs borrowers thousands in unnecessary capitalized interest that could have been avoided through a subsidized deferment option.
What is deferment used for in real life?: Deferment is used for specific situations like returning to school, unemployment, or military service, where you qualify for a pause and possibly receive interest subsidies on your federal student loans.
Which loan types qualify for deferment versus forbearance?: Deferment qualifies for federal student loans with specific conditions like economic hardship, while forbearance qualifies for almost any federal loan type, including those with private lenders and defaulted loans.
Is deferment or forbearance better for private student loans?: Forbearance is typically your only option for private student loans because private lenders rarely offer deferment, and any payment pause through forbearance will always accrue interest on your entire balance.