Staying out of default will help protect a borrower's credit record. Deferment A borrower is allowed to postpone payments on the loan principal. During deferment, the federal government will pay the interest on a subsidized Stafford Loan. On others, the interest will accrue and be capitalized, and the borrower is responsible for paying it. Delinquency Failure to make loan payments when due.
Delinquency can lead to default.
For dependent students, the financial aid package is based on both student and parent income and assets. Disbursement A release of funds to the school for delivery to the borrower. This is done either electronically or with a check. Any transfer of funds that is an electronic-based transaction, such as automatic deduction. It indicates how much of a family's resources are available to contribute to the student's cost of education.