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Deferment
Definition
Temporary postponement of student loan payments during specific qualifying situations.
Explanation
Deferment pauses student loan payments for reasons like school enrollment, unemployment, economic hardship (up to 3 years), or military service. During deferment, interest does not accrue on subsidized loans but does accrue on unsubsidized loans.
Deferment is generally better than forbearance because subsidized loan interest is covered. Apply through your loan servicer with documentation.
Example
A borrower returns to graduate school and requests in-school deferment. Payments pause. Subsidized loan interest is paid by the government.