Who is responsible for the interest that accrues during a deferment?

If you have Direct Subsidized loans and you are in a deferment, the interest is paid by the Federal Government. If your loans are Direct Unsubsidized loans the interest that accrues during a deferment period is your responsibility. If the interest is unpaid at the end of the deferment or forbearance period, it capitalizes (is added to the principal balance).