Deferment


Deferment

occurs when a borrower is allowed to postpone repaying the loan. If the student has a subsidized loan, the federal government pays the interest charges during the deferment period. If they have an unsubsidized loan, they are responsible for the interest that accrues during the deferment period. The student can still postpone paying the interest charges by capitalizing the interest, which increases the size of the loan. Most federal loan programs allow students to defer their loans while they are in school at least halftime. If they do not qualify for a deferment, they may be able to get a Forbearance. Students cannot get a deferment if their loan is in default.