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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.

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