A forbearance student loan is a temporary pause or reduction in your federal student loan payments. When you enter forbearance, you can stop making payments or make smaller payments for a set period, usually up to 12 months. Interest continues to accrue (grow) on all loan types, including subsidized loans, which means your total debt may increase.
How Forbearance Works
Forbearance is a tool to help borrowers who are facing financial hardship, medical expenses, or other situations that make it hard to pay. You must request it from your loan servicer, and they decide if you qualify. Unlike deferment, forbearance is often easier to get but costs more in the long run because interest keeps adding up.
There are two main types: general forbearance and mandatory forbearance. General forbearance is granted at the servicer’s discretion for reasons like illness or financial trouble. Mandatory forbearance must be granted if you meet specific conditions, such as serving in a medical or dental internship or having student loan payments that exceed 20% of your monthly income.
General vs. Mandatory Forbearance
| Type | Who Grants It | Common Reasons | Interest Accrues |
|---|---|---|---|
| General | Loan servicer (discretionary) | Financial hardship, illness, other situations | Yes, on all loans |
| Mandatory | Must be granted if you qualify | Medical/dental internship, disability, income-based payments | Yes, on all loans |
How to Apply for Forbearance
To get forbearance, contact your loan servicer directly. You can ask for a general forbearance by explaining your situation, but you’ll need to provide documentation for mandatory forbearance. Your servicer will tell you what forms to submit, and once approved, you’ll receive a notice with the start and end dates.
- Call or log in to your loan servicer’s website to request forbearance.
- Fill out the required application form (usually available online).
- Provide proof of eligibility, such as medical bills or income statements, if required.
- Keep a copy of your approval and the end date for your records.
Forbearance vs. Deferment: Key Differences
Many people confuse forbearance with deferment. The biggest difference is interest: in deferment, you may not owe interest on subsidized loans, but in forbearance, you always owe it. Deferment is typically for specific situations like returning to school or unemployment, while forbearance is more flexible but more expensive.
For example, if you have a subsidized loan and enter deferment, the government may pay the interest during that time. But in forbearance, no one pays the interest, so it gets added to your principal balance when you start paying again. This means your monthly payments after forbearance could be higher.
Which Option Should You Choose?
If you qualify for deferment, it’s usually the better choice because it saves you money on interest. But if you don’t qualify, forbearance can still help you avoid default. Always compare your options and ask your servicer about income-driven repayment plans, which may offer lower payments without pausing interest.
Impact of Forbearance on Your Loans
Forbearance can provide immediate relief, but it has long-term costs. Interest that accrues during forbearance is capitalized (added to your principal) when the forbearance ends. This increases the total amount you owe, and you’ll pay interest on that higher balance. Over time, this can significantly raise the total cost of your loan.
For example, if you have a $10,000 loan at 5% interest and take a 12-month forbearance, you’ll add about $500 in interest to your balance. That extra $500 will then accrue interest for the rest of the loan’s life. So, use forbearance only when you truly need it and try to keep it as short as possible.
Alternatives to Forbearance
Before choosing forbearance, explore other options that may be less costly. Income-driven repayment (IDR) plans adjust your payment based on your income and family size, sometimes to $0 per month. Loan rehabilitation or consolidation can also help if you’re struggling to pay. Always ask your servicer about these alternatives.
Frequently Asked Questions
Frequently Asked Questions
How long can I stay in forbearance on my student loans?
Most forbearance periods last up to 12 months, but you can request an extension if you still need help. However, the total time in forbearance is usually limited to three years over the life of your loan.
Does forbearance hurt my credit score?
No, forbearance itself does not hurt your credit score as long as you make the required payments or have the agreement in place. However, missing payments without approval will damage your credit.
Will I owe interest after forbearance?
Yes, interest accrues on all loans during forbearance, and it will be added to your principal balance when forbearance ends. This means you’ll pay interest on that interest.
Can I get forbearance on private student loans?
Private lenders may offer forbearance, but it’s not guaranteed and terms vary. You must contact your private lender to ask about options, and they are not required to provide forbearance.
What is the difference between forbearance and deferment?
Deferment allows you to temporarily stop payments, and for subsidized loans, the government may pay the interest. Forbearance also pauses or reduces payments, but interest always accrues on all loans.
Final Thoughts
Forbearance is a helpful safety net when you can’t make your student loan payments, but it’s not free. Always ask about deferment and income-driven repayment plans first, and only use forbearance when necessary. Keep the period as short as possible and understand that your total debt may grow. If you’re unsure, call your loan servicer and ask for a detailed explanation of all your options before making a decision.
Frequently Asked Questions
How long can I stay in forbearance on my student loans?
Most forbearance periods last up to 12 months, but you can request an extension if you still need help. However, the total time in forbearance is usually limited to three years over the life of your loan.
Does forbearance hurt my credit score?
No, forbearance itself does not hurt your credit score as long as you make the required payments or have the agreement in place. However, missing payments without approval will damage your credit.
Will I owe interest after forbearance?
Yes, interest accrues on all loans during forbearance, and it will be added to your principal balance when forbearance ends. This means you’ll pay interest on that interest.
Can I get forbearance on private student loans?
Private lenders may offer forbearance, but it’s not guaranteed and terms vary. You must contact your private lender to ask about options, and they are not required to provide forbearance.
What is the difference between forbearance and deferment?
Deferment allows you to temporarily stop payments, and for subsidized loans, the government may pay the interest. Forbearance also pauses or reduces payments, but interest always accrues on all loans.
