Forbearance is a temporary pause or reduction of your student loan payments. If you are struggling to make payments due to financial hardship, illness, or other reasons, forbearance lets you stop making payments or make smaller payments for a set period. This can provide short-term relief, but interest continues to accrue on most loans, which means you may owe more later.
How Forbearance Works
When you enter forbearance, your loan servicer agrees to let you temporarily stop making payments. The length of forbearance varies, but it is usually granted in 12-month increments. You may need to request a new forbearance period if you still need help after that time.
There are two main types of forbearance: general and mandatory. General forbearance is at the servicer’s discretion, while mandatory forbearance must be granted if you meet certain conditions, such as serving in a medical or dental residency program or having student loan payments that exceed a certain percentage of your income.
General Forbearance
General forbearance is available for financial hardship, illness, or other situations that your servicer approves. You must apply and provide documentation. The servicer decides whether to grant it.
Mandatory Forbearance
Mandatory forbearance must be granted if you qualify under specific federal rules. Examples include serving in an AmeriCorps position, teaching in a program that qualifies for student loan forgiveness, or being activated for military duty.
Forbearance vs. Deferment
Deferment is similar to forbearance, but the key difference is interest. During deferment, you may not have to pay interest on subsidized federal loans. During forbearance, interest always accrues on all loan types. This means forbearance can be more expensive in the long run.
| Feature | Forbearance | Deferment |
|---|---|---|
| Payment pause | Yes | Yes |
| Interest on subsidized loans | Accrues (you pay it) | May be paid by government |
| Eligibility | Financial hardship, illness | Return to school, unemployment, economic hardship |
| Application required | Yes, usually | Yes, usually |
How to Apply for Forbearance
Contact your loan servicer directly to request forbearance. You will need to explain your situation and provide supporting documents, such as medical bills or proof of income. Be sure to ask about the exact forms or online process required.
- Call your loan servicer’s customer service line.
- Check your servicer’s website for a forbearance request form.
- Submit any required documentation, like tax returns or pay stubs.
- Keep a copy of your request and confirmation for your records.
Your servicer must respond to your request within a certain timeframe. If approved, you will receive a notice with the forbearance start and end dates.
Important Considerations Before Choosing Forbearance
Forbearance should be a last resort because interest continues to grow. This can increase your total loan balance, and you may end up paying much more over time. Before applying, explore other options like income-driven repayment plans, which cap payments based on your income.
Also, forbearance periods count toward loan forgiveness programs in some cases, but not always. For example, Public Service Loan Forgiveness counts forbearance periods only if you make qualifying payments later. Be sure to check the specific rules for your loan type.
Private Student Loan Forbearance
Private lenders may offer their own forbearance options, but they are not required to follow federal rules. Contact your private lender to ask about hardship programs. Terms vary, so read the agreement carefully. Some private lenders may charge fees or require a minimum payment.
Alternatives to Forbearance
Before choosing forbearance, consider these alternatives:
- Income-driven repayment plans that adjust your monthly payment to your income.
- Loan consolidation to lower your monthly payment by extending the term.
- Deferment if you qualify, especially for subsidized loans.
- Student loan refinancing, but only if you have good credit and stable income.
Each option has pros and cons, so talk to your servicer or a financial aid counselor to decide what is best for your situation.
Summary
Forbearance can give you temporary relief from student loan payments, but it comes with costs. Interest continues to accrue, which means you will owe more later. Always compare forbearance with other options and apply only if you truly need it. Contact your loan servicer to discuss your specific situation and make an informed decision.
Frequently Asked Questions
What is forbearance in student loans?
Forbearance is a temporary pause or reduction of your student loan payments, granted by your loan servicer during financial hardship.
How do I apply for student loan forbearance?
You must contact your loan servicer and submit a forbearance request, often with supporting documents like proof of income or medical bills.
Does forbearance affect my credit score?
No, forbearance itself does not hurt your credit score, but it may be reported as a special status on your credit report.
Can I get forbearance on private student loans?
Yes, some private lenders offer forbearance, but it is not guaranteed and terms vary by lender.
Is forbearance the same as deferment?
No, deferment may stop interest on subsidized loans, while forbearance always accrues interest on all loans.
