What is the difference between a loan deferment and a loan forbearance?

A loan deferment and a loan forbearance are two different ways to manage student loan debt in Wisconsin. A loan deferment is an agreement with your loan servicer that allows you to temporarily stop making payments on your loan and typically interest will not accrue during this period. The two most common deferment options are economic hardship deferment and in-school deferment. A loan forbearance is another agreement with your loan servicer that allows you to temporarily stop making payments on your loan. However, interest will typically continue to accrue during this period. A forbearance is available for a number of different reasons, including financial hardship, illness, or a natural disaster. When you enter into one of these agreements, it is important to understand that they are not a complete forgiveness of the loan debt. Once the period of deferment or forbearance has ended you will have to resume making full payments on the loan. Additionally, interest that accrued during this period will be added to your principal balance. The main difference between a loan deferment and a loan forbearance is that while a loan deferment allows you to temporarily stop making payments and interest does not accrue, a loan forbearance requires that you temporarily stop making payments but interest will continue to accrue. Therefore, it may be more beneficial to pursue a loan deferment over a loan forbearance depending on the situation.

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What is the difference between a loan deferment and a loan forbearance?

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