How does a loan deferment primarily differ from a loan forbearance?
A
Deferment always stops interest accrual on all loan types, while forbearance does not.
B
Deferment is generally granted for longer periods than forbearance.
C
Interest typically does not accrue on subsidized loans during deferment, but usually accrues on all loans during forbearance.
D
Forbearance automatically qualifies a borrower for Public Service Loan Forgiveness (PSLF).
✓ Correct Answer: Option C
A key difference is that interest does not accrue on subsidized federal loans during deferment, but it typically accrues on all loan types (subsidized and unsubsidized) during forbearance.
💡 Why is C) the correct answer?
The correct answer to the question "How does a loan deferment primarily differ from a loan forbearance?" is Option C: Interest typically does not accrue on subsidized loans during deferment, but usually accrues on all loans during forbearance..
The other options — A) Deferment always stops interest accrual on all loan types, while forbearance does not., B) Deferment is generally granted for longer periods than forbearance., D) Forbearance automatically qualifies a borrower for Public Service Loan Forgiveness (PSLF). — are incorrect for this College Advising question. As explained above: A key difference is that interest does not accrue on subsidized federal loans during deferment, but it typically accrues on all loan types (subsidized and unsubsidized) during forbearance.
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