MBA Finances

Federal Loans FAQ's

Does interest accrue during a deferment or forbearance?

Interest accrual depends upon the type of loan and the postponement secured (deferment or forbearance).

	Deferment	Forbearance
Subsidized Loan	No, interest is paid by the government	Yes, interest accrues
Unsubsidized Loan	Yes, interest accrues during both deferment and forbearance.
Grad PLUS Loan	Yes, interest accrues during both deferment and forbearance.
Consolidation Loan	Interest will accrue on the portion of the consolidation loan that was previously an unsubsidized loan, but not on the portion that was previously a subsidized loan.	Yes, interest accrues on total loan amount--regardless of previous loan type.