Forbearance on a student loan is a temporary pause or reduction of your monthly payments, granted by your loan servicer when you face financial hardship, illness, or other qualifying circumstances. Unlike deferment, interest continues to accrue on all loan types during forbearance, including subsidized loans. This means you will owe more over time, but it can provide short-term relief if you cannot afford your payments.
How Forbearance Works
When you enter forbearance, your loan servicer agrees to let you stop making payments or reduce your payment amount for a set period, usually up to 12 months at a time. You must apply for forbearance, and in most cases, you need to show proof of hardship, such as medical bills, unemployment, or a drop in income. If you qualify, the servicer adds the missed interest to your loan balance, so your total debt grows.
Forbearance is not automatic—you have to request it. You can ask for a general forbearance for financial hardship, or a mandatory forbearance for specific situations like a medical residency or a teaching service that qualifies. Your servicer will tell you which type applies and how long you can use it.
Types of Forbearance
There are two main categories: general and mandatory. General forbearance is at the servicer’s discretion for hardships like unexpected expenses or reduced hours. Mandatory forbearance is required by law for borrowers serving in certain public service roles, like AmeriCorps or the National Guard, or those with medical or dental internships. In both cases, you must submit a request and supporting documents.
| Type | Who Qualifies | Typical Duration |
|---|---|---|
| General forbearance | Borrowers with financial hardship, illness, or other reasons | Up to 12 months, can be renewed |
| Mandatory forbearance | Medical/dental residency, teaching service, National Guard duty, or monthly payment > 20% of gross income | Up to 12 months, must reapply |
Forbearance vs. Deferment: Key Differences
Many borrowers confuse forbearance with deferment, but they are not the same. Deferment also pauses payments, but it is often available for specific situations like returning to school or unemployment. The critical difference is interest: on subsidized federal loans, interest does not accrue during deferment, but it always accrues during forbearance. For unsubsidized loans, interest accrues in both cases.
Because of this, forbearance is usually more expensive in the long run. If you have a subsidized loan, you should try to qualify for deferment first. For private loans, forbearance terms vary by lender, so check your contract.
Which Option Is Better?
Deferment is better if you can qualify, especially for subsidized loans. Forbearance is a fallback for those who do not meet deferment criteria. Always ask your servicer about deferment before applying for forbearance. If you only need a few months of relief, forbearance may be simpler, but weigh the extra interest cost.
Impact of Forbearance on Your Loan
When you use forbearance, interest continues to build daily. On unsubsidized loans, this interest is capitalized—added to your principal balance—at the end of the forbearance period. Capitalization increases your principal, so future interest is calculated on a higher amount, making your debt grow faster. For example, if you have a $10,000 loan at 5% interest and pause payments for 12 months, you’ll owe about $500 in interest, which becomes part of your new balance.
- Interest accrues on all loans during forbearance, including subsidized ones.
- Unpaid interest is capitalized, increasing your principal balance.
- Your credit score is not negatively affected if you make no payments, but your total debt rises.
- Forbearance counts toward your total repayment timeline, so you may have fewer months left to pay.
- You may not qualify for loan forgiveness programs if you use forbearance excessively.
How to Apply for Forbearance
Contact your loan servicer directly to request forbearance. You can usually apply online, by phone, or by mail. You’ll need to explain your hardship and provide documentation, such as medical bills, a layoff notice, or tax returns. Your servicer must respond within a certain time, and if approved, you’ll get a written confirmation with the forbearance period’s start and end dates.
Make sure to reapply if you need an extension. Forbearance is not indefinite; most have a maximum of three years total for federal loans. Track your usage carefully to avoid surprises.
Alternatives to Forbearance
Before choosing forbearance, explore other options that may be less costly. Income-driven repayment (IDR) plans cap your monthly payment at a percentage of your discretionary income, sometimes as low as $0. IDR plans also count toward loan forgiveness after 20 or 25 years. Another option is a deferment if you qualify, or you can request a reduced payment plan directly from your servicer.
If you are in default, forbearance is not available—you would need to enter a rehabilitation program. Always compare the long-term cost of forbearance versus IDR. For many borrowers, IDR is a better choice because it prevents interest capitalization and keeps you on track for forgiveness.
When to Use Forbearance
Use forbearance only as a last resort for short-term emergencies, like a medical crisis or temporary job loss. If you expect a long-term income drop, switch to an IDR plan instead. Forbearance can be useful if you need a few months to find a new job and you can pay the accruing interest voluntarily to avoid capitalization.
Frequently Asked Questions
This section is covered in the FAQ below.
Final Thoughts
Forbearance is a helpful safety net for temporary payment problems, but it comes with real costs. Interest keeps adding up, and capitalization can inflate your debt significantly. Always ask about deferment and income-driven repayment first, and use forbearance only when you have no better option. If you must use it, make a plan to resume payments as soon as possible and consider paying at least the interest to keep your balance from growing.
Frequently Asked Questions
How long can I keep my student loans in forbearance?
For federal student loans, forbearance is typically granted for up to 12 months at a time, and you can renew it for a maximum of three years total.
Does forbearance hurt my credit score?
No, forbearance itself does not hurt your credit score because your loan is reported as current, but missing payments before you get approved can cause damage.
Can I pay interest during forbearance to avoid capitalization?
Yes, you can voluntarily pay the accruing interest during forbearance, which prevents it from being added to your principal balance.
What is the difference between forbearance and deferment?
Deferment pauses payments and may not accrue interest on subsidized loans, while forbearance always accrues interest on all loan types.
Can I use forbearance on private student loans?
Private lenders offer forbearance, but terms vary widely, and not all lenders provide it, so you must check with your specific lender.
