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What is a Deferment?
A student loan deferment is an authorized temporary suspension of repayment
that is granted under certain circumstances. Loans in the Federal Family Education
Loan Program (FFELP) allow for deferment for a wide variety of reasons.
Sometimes deferment may be automatically applied on your behalf, but
in most cases you must apply, meet the qualifications, and make arrangements
with the servicer of your loans to receive deferment.
Subsidized vs. Unsubsidized Stafford Loans If you have a student loan that
is a subsidized Stafford loan, an added benefit is that the Government
pays the accrued interest during any approved periods of deferment.
What is Forbearance?
Forbearance differs
from deferment in that most forms of forbearance are offered at the discretion
of the loan holder. While all loans in the Federal Family
Education Loan Program (FFELP) allow
forbearance, it is not granted automatically.
You must apply, meet the qualifications, and make arrangements
with the servicer of your loans. You remain responsible for paying the daily interest accrual for all loan types
during periods of forbearance.
