For many people, student loans are a necessary part of financing their education. However, once you graduate, you may find yourself struggling to make your loan payments on time. In these situations, you may be able to take advantage of forbearance or deferment options. But what exactly is the difference between the two?

Forbearance and deferment are both options that allow you to temporarily stop making payments on your student loans. However, there are some key differences between the two. Let’s take a closer look at each option:

Forbearance:
– Forbearance allows you to temporarily stop making payments on your student loans or reduce the amount you pay for a specified period of time.
– Interest will continue to accrue on your loans during forbearance, which means that your loan balance will increase.
– Most federal student loans allow you to request forbearance for up to 12 months at a time, with a maximum of three years.
– Forbearance is typically granted if you are experiencing financial hardship or other difficulties that make it difficult for you to make your loan payments.

Deferment:
– Deferment also allows you to temporarily stop making payments on your student loans, but unlike forbearance, no interest will accrue on subsidized loans during the deferment period.
– You may qualify for deferment if you are enrolled in school at least half-time, are unemployed, or are experiencing economic hardship.
– Deferment periods are typically longer than forbearance periods and can last for up to three years.
– In some cases, you may even qualify for a deferment that allows you to temporarily postpone making payments on your loans for up to three years.

So, which option is right for you? It really depends on your individual circumstances. If you are still in school or facing economic hardship, deferment may be the best option for you since no interest will accrue on subsidized loans. However, if you are experiencing financial difficulties and need to temporarily reduce your payments or stop paying altogether, forbearance may be the better choice.

Ultimately, both forbearance and deferment can provide temporary relief from student loan payments, but it’s important to understand the differences between the two options so that you can make the best decision for your financial situation. If you are struggling to make your student loan payments, contact your loan servicer to discuss your options and see if forbearance or deferment is right for you.