• During the coronavirus pandemic, federal student loans are in automatic forbearance, and many private student loan lenders are offering forbearance or deferment.
  • Forbearance and deferment are both types of relief that allow you to pause or reduce monthly student loan payments.
  • Under normal circumstances, it's easier to qualify for forbearance than deferment; interest also always accrues with forbearance and sometimes accrues with deferment.
  • You'll often hear these two term used interchangeably during the pandemic, especially with private student loan lenders, so be sure to ask about the terms of your payment relief before enrolling.
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If you have federal student loans, you've probably heard that the US government has automatically placed your payments in forbearance through September 30 due to the coronavirus pandemic.

Private student loan companies are offering relief , too, but assistance varies by lender. Maybe your lender says it's offering forbearance, or maybe it's advertising deferment ... or both.

During the coronavirus outbreak, you'll probably see the words forbearance and deferment thrown around a lot.

These two terms both refer to pausing or reducing your monthly student loan payments. They're often used interchangeably yes, even by lending and banking professionals but there are actually a couple key differences.

The differences between student loan forbearance and deferment

There are two main differences between student loan forbearance and deferment: interest accrual and availability.

Forbearance Deferment Interest Interest always accrues Interest sometimes accrues Availability Easier to qualify Harder to qualify

When you enroll in forbearance, interest always continues to accrue while payments are paused. Interest may continue to build when payments are in deferment, but it will be paused if you defer subsidized federal student loans or Perkins loans.

Forbearance is also easier to qualify for than deferment. When you apply for deferment, especially with the federal government, you typically need to have a reason, such as unemployment.

You don't need a specific reason to qualify for forbearance. However, with private student loan lenders, you can often apply for a certain type of forbearance if you're in a unique situation, such as natural disaster forbearance or economic hardship forbearance. The rules for your relief depend on which type of forbearance you enroll in.

The terms are being used differently during the coronavirus

Many people mix upforbearanceanddeferment under normal circumstances. As the coronavirus spreads, you're bound to hear the two words used synonymously.

For example, all pre-existing rules for federal student loan deferment and forbearance have gone out the window. The government has placed all federal student loans in automatic forbearance through September 30 but interest isn't accruing.

If interest is paused, why isn't the government referring to this relief program as deferment? It's hard to say. Maybe because, like forbearance under normal circumstances, you don't have to meet strict qualifications to enroll.

Some private student lenders are also using the terms defermentandforbearance interchangeably on the COVID-19 relief pages of their websites. Like the federal government, certain companies are using the word forbearance but pausing interest.

Before enrolling in either, ask your private student loan lender about the terms

If you have federal student loans, your payments are automatically paused through September 30 you don't need to contact anyone to enroll.

But if you have private student loans , you have to make the decision about whether to enroll in a relief program.

Because the differences between forbearance and deferment are so murky right now, be sure to ask your private student loan lender about the terms of your relief program before enrolling. Don't assume that interest will accrue just because you're enrolling in forbearance or that it will be difficult to qualify just because the company uses the word deferment on its website.

In general, try to get as much information as possible before accepting private student loan relief during the pandemic. Student loan deferment and forbearance can be helpful, but you don't want any surprises down the road that could cause long-term problems.

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