What is the difference between loan deferment and forbearance?

When you can't make your federal student loan payments, the federal government gives you two structured options to pause: deferment and forbearance. Both stop the requirement to pay, but they treat interest differently — and that difference can add thousands of dollars to your balance if you choose the wrong one or stay in the status too long. The Federal Student Aid office explains both programs. For most borrowers, an income-driven repayment plan is a better long-term option than either — exhaust federal repayment options before pausing.

Deferment: the better option when you qualify

Deferment allows you to temporarily stop making payments if you meet one of several qualifying conditions — enrollment in school at least half-time, unemployment, economic hardship, active military duty, or a few others. The critical advantage: interest does not accrue on subsidized federal loans during a deferment period. Unsubsidized loans and PLUS loans still accrue interest, but the government effectively covers it on the subsidized portion. Qualifying conditions are set by statute and reviewed by your loan servicer.

Forbearance: broader eligibility, but interest always accrues

Forbearance is available even when you don't meet deferment criteria — financial difficulty, medical expenses, change in employment. However, interest accrues on all federal loan types (subsidized and unsubsidized) during forbearance. That accrued interest can capitalize (be added to your principal) when forbearance ends, which increases what you owe. See studentaid.gov on forbearance for the full list of types and conditions.

• Deferment: interest does NOT accrue on subsidized loans; does accrue on unsubsidized and PLUS loans.
• Forbearance: interest accrues on ALL loan types — subsidized, unsubsidized, and PLUS.
• Deferment requires qualifying conditions (in school, unemployed, economic hardship, military service, etc.).
• Forbearance has broader eligibility but is a last resort — unpaid interest can capitalize when it ends.
• Income-driven repayment (IDR) plans are often a better long-term alternative to either option.

Consider income-driven repayment first

Before requesting deferment or forbearance, evaluate whether an income-driven repayment plan would serve you better. IDR plans cap your monthly payment at a percentage of discretionary income — sometimes as low as $0 per month — and a $0 IDR payment still counts toward forgiveness timelines and doesn't cause interest to capitalize the way forbearance can. The CFPB also provides guidance on managing student loan repayment.

How much debt actually sits in each status

Federal Student Aid's June 2026 portfolio report shows the two options are used very differently at scale: $157 billion in loans are currently in deferment status (held by roughly 3.6 million recipients, about 9% of the portfolio), compared with $485 billion in loans in forbearance (roughly 8.4 million recipients, about one-fifth of the portfolio). Forbearance carries more than 3x the deferment total by dollar volume — consistent with its broader eligibility criteria — which is exactly why the interest-accrual difference matters so much: a much larger pool of debt sits in the status where interest keeps compounding.