Both pause payments; the difference is interest. In deferment, the government covers interest on subsidized loans. In forbearance, interest accrues on everything and can capitalize — growing your balance while you’re "paused."
Deferment and forbearance both stop the payment clock, but they’re priced differently. Deferment — available for school, unemployment, economic hardship, military service — comes with a subsidy: the government pays interest on subsidized federal loans while you’re deferred. Forbearance is easier to get but pauses nothing but the payments: interest accrues on the entire balance, and when the forbearance ends, unpaid interest often capitalizes — gets added to principal, so you pay interest on interest afterward. The pattern that traps people: serial forbearances that quietly grow a balance for years. Often the better answer is income-driven repayment, where required payments can be as low as zero while still counting toward forgiveness timelines.
On subsidized federal loans, the government pays it during deferment. On unsubsidized loans, interest accrues in both deferment and forbearance.
Often — IDR payments can be as low as $0, keep the loan current, and count toward forgiveness timelines, unlike forbearance which just pauses while interest grows.
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