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What is the difference between a deferment and a forbearance on my student loan?

A very common question I get about federal student loans is the difference between a deferment and a forbearance.  The shortest answer I can give is that they are different tools, usually used for different purposes.

In simplest terms, a deferment is an entitlement.  It must be granted if you qualify.  On the other hand, most forbearances are granted at a lender’s discretion. The more specific differences are as follows:

What is a Deferment?

A deferment is the more formal process, as a deferment is applied for in writing, often with supporting documentation.  It starts when the circumstances that gave rise to the request started, not when the request was made.  The only exception is with an unemployment deferment, which can only go back six (6) months.  There are several types of deferments:

What is a Forbearance?

A forbearance is less formal, as most requests can be made verbally over the phone (although those based on income do require documentary proof).  There are two kinds of forbearances:

  • Discretionary
  • Mandatory

During deferment, the federal government pays interest that accrues on a subsidized loan.  But you are responsible for interest that accrues during a forbearance, and during a deferment on an unsubsidized loan.

They Are Temporary Fixes

The important thing to bear in mind with deferments and forbearances is that they are temporary fixes, not solutions.  If you cannot afford your student loan payment, then these are not going to help you in the long term.  This is because:

  • They last for a limited amount of time (depending on the type)
  • There may be a limited amount of times a particular one can be granted
  • Many of them have a certain amount of lender discretion

They have their uses, but getting into some sort of repayment plan is really the best way to go.

So What Do I Do?

If you live in southern New Jersey and would like to consult with me on your loans, please feel free to call my office at 856-432-4113 or contact me through this site to schedule an appointment in my Woodbury office to discuss your case.

If you would like more information about student loans, you can dowload my free book, I Graduated; Now What? A Guide to Dealing with Your Student Loans.

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Steven J. Richardson
Bankruptcy, Collections, Student Loan, DUI and Traffic Court attorney in Woodbury, NJ.