The Difference Between Student Loan Deferment and Forbearance

As you're applying for student loans or waiting to pay these loans back, it is helpful to read up on all the rules involved. This can be particularly beneficial for repayments because you don't want to be caught off guard by a rate increase or get a late fee for more than you can afford. Student loan centers and lenders are very accommodating when answering your questions, so you shouldn't be worried about any of these situations happening out of the blue. But it's still a good idea to take the time to investigate your options because if you have trouble repaying your loans, you can get assistance.

If you're low on funds at the moment and need a brief reprieve to save up a little money, you can apply for either deferment or forbearance. Each program is different, and knowing each option's capabilities can help you decide which one is best if you need to pause your payments. Here is a primer on the two federal student loan assistance options:

Deferment
If you apply for this option, your loan repayment will be suspended temporarily. The length of the postponement is different for each lender, so if you're going to go this route, ask your loan provider how long it will grant you a suspension. Interest piling up may be one of the reasons you need to hold off on repaying your loans, and with deferment, you have a few options. You can continue to let your interest build up or you can just pay your interest and not your principal. This option could be beneficial because getting the interest taken care of can make paying your principal easier. 

You are eligible for deferment if you meet any of these conditions:

  • Enrolled in a graduate fellowship program
  • Currently unemployed
  • On active duty during a war or national emergency
  • A member of the National Guard

Forbearance
This option is similar to deferment but is different in a few ways. Your payments will be temporarily suspended, but in order to avoid getting a higher principal balance you should pay off the interest that accrues. This could make paying your loan difficult. Forbearance is a bit tougher to get approved for, and you may not be granted this option even if you lost your job, have medical issues or are involved in the military.