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QuizMultiple Choice

Student Loans — Quiz

Question 1 • Financial Algebra/Mathematics

What is a major difference between forbearance and deferment for student loans?

Answer
A
In deferment, interest continues to accrue for unsubsidized loans and PLUS loans.
B
Deferment is only available for PLUS loans.
C
In forbearance, interest does not accrue on any loan types.
D
Forbearance does not allow a reduction of payments.

Explanation

During deferment, interest generally does not accrue on subsidized loans, but it continues to accrue on unsubsidized and PLUS loans. Forbearance usually allows payments to be paused or reduced, but interest continues to accrue on all loan types. Therefore, the major difference described in choice A is correct.

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