managing student loans

Deferment and Forbearance

Deferment and forbearance are options that may help if you haven't found a job yet or are worried you may not be able to pay back your student loans right now. Both these options allow you to temporarily suspend payment. How do they differ?

1. During deferment, interest always continues to accrue.
2. During deferment, interest is always waived.
3. During forbearance, interest always continues accruing.

"C" is correct. During deferment, interest on subsidized federal loans is waived, while interest on unsubsidized federal loans continues to accrue. To qualify for deferment, you must be enrolled at least half-time as a student or on active duty in the armed services, be unemployed or suffer other economic hardship, have a temporary disability or be in rehabilitation for a disability.