Many people here in NJ who cannot pay their federal student loans seek to hide from the problem by getting a deferment or forbearance. Although this can be helpful if you need to buy a short amount of time to get an administrative discharge or apply for an income based repayment plan, it can have a bad effect in the long run.
What bad effect is that? The accrual and capitalization of interest! What you might not know is that while you are in a deferment or forbearance, interest on the loans continues to accrue. It then capitalizes into principal, thus making your loan balance much higher! The only exception to this would be a subsidized Stafford loan in a deferment. Learn more about it here!