Excerpt from: Law Office of Matthew Stoloff (click for full article)
To get a deferment, you must apply to the federal government, and you must qualify based on your life circumstances, such as economic hardship, active duty service in the military, and so forth. The benefit of deferment is that, under certain circumstances, the federal government may pay the interest that was being charged during the deferment period on a federally subsidized student loan.
Forbearance is similar to a deferment in the sense that you do not have to make payments towards your student loans or those payments may be lowered for a period of time. Forbearance may be an option if you do not qualify for a deferment. To get a forbearance of your loan, you must apply to your loan servicer, not the federal government. If you meet the eligibility criteria for a mandatory forbearance, the servicer must grant your request. They also have the discretion to grant you a forbearance if you are suffering from financial hardship or illness.