Student loan forbearance is a temporary pause or reduction of your monthly loan payments, granted by your loan servicer. It is an option for borrowers who are facing financial hardship but do not qualify for an income-driven repayment plan or deferment. Unlike deferment, interest usually continues to accrue on all loan types during forbearance, which can increase your total debt.
How Does Student Loan Forbearance Work?
When you enter forbearance, your servicer allows you to stop making payments or make smaller payments for a set period. You must request it, and the servicer decides if you qualify. Forbearance is not automatic; you need to apply and provide proof of hardship, such as medical bills or job loss.
During forbearance, interest continues to grow on your loans. If you have unsubsidized loans, that interest is added to your principal balance (capitalization) after the forbearance ends. For subsidized loans, interest also accrues, but the government may pay it in certain cases, such as during deferment—not forbearance.
Types of Student Loan Forbearance
There are two main types of forbearance: general and mandatory. General forbearance is granted at the servicer’s discretion. Mandatory forbearance must be granted if you meet specific conditions, such as serving in a medical or dental internship or residency.
| Type | Who Qualifies | How to Get It |
|---|---|---|
| General Forbearance | Borrowers with financial hardship, illness, or other situations | Request from servicer; servicer decides |
| Mandatory Forbearance | Borrowers in medical/dental internship, National Guard duty, or teaching service | Must meet specific conditions; servicer must grant |
General Forbearance
General forbearance is available for federal student loans, including Direct Loans and FFEL loans. You can get it for up to 12 months at a time, but there is no overall limit. You can renew it as long as you still face hardship. Your servicer may ask for documentation like pay stubs or medical records.
Mandatory Forbearance
Mandatory forbearance is required by law for certain situations. These include serving in a medical or dental internship or residency, serving in the National Guard (if activated), or teaching in a program that qualifies for teacher loan forgiveness. You must provide proof, and the forbearance is granted for up to 12 months, renewable.
Pros and Cons of Forbearance
Before you choose forbearance, weigh the benefits and drawbacks carefully. It can be a lifeline, but it has long-term costs.
- Stops or reduces your monthly payments temporarily, freeing up cash for other needs.
- Prevents default and keeps your loan in good standing.
- Interest continues to accrue, increasing the total amount you owe.
- Capitalization can add unpaid interest to your principal, making future payments higher.
- Time in forbearance does not count toward loan forgiveness programs like Public Service Loan Forgiveness.
How to Apply for Forbearance
To apply, contact your loan servicer directly. You can find your servicer by logging into your account on the Federal Student Aid website. Explain your situation and request a forbearance form. Complete the form and submit any required documentation, such as proof of income or a letter from your employer.
It is best to apply before you miss a payment. If you already missed payments, ask for forbearance retroactively, but it is not guaranteed. Keep records of all communications with your servicer.
Alternatives to Forbearance
Forbearance is not the only option. Consider income-driven repayment (IDR) plans, which cap payments at a percentage of your discretionary income. Deferment is another option, especially if you have subsidized loans, because interest may not accrue. You might also request a reduced payment plan or an extended repayment term.
If you have private loans, forbearance is less common and depends on your lender. Contact your private lender to ask about hardship options. Federal loans usually offer more protection.
Impact on Credit and Loan Balance
Forbearance does not directly hurt your credit score, but it may affect your ability to get new credit. Lenders may see that you used forbearance as a sign of financial stress. Also, because interest capitalizes, your loan balance can increase, which may raise your monthly payments after forbearance ends.
To minimize the impact, pay at least the interest during forbearance if you can. That prevents capitalization and keeps your balance from growing. Even a small payment can help.
Key Deadlines and Time Limits
General forbearance is granted in increments of up to 12 months. There is no cumulative limit for general forbearance, but you must reapply each time. Mandatory forbearance also lasts up to 12 months and can be renewed. However, for mandatory forbearance related to medical or dental internship, the total limit is 36 months.
Summary
Student loan forbearance can provide temporary relief when you cannot make payments, but it comes with the cost of accruing interest. Always explore other options like income-driven repayment or deferment first. If you do choose forbearance, keep track of your loan balance and consider paying interest to avoid a larger debt later. Contact your servicer as soon as you face hardship to discuss the best path for your situation.
Frequently Asked Questions
What is forbearance of student loans?
Forbearance is a temporary pause or reduction of your student loan payments, granted by your loan servicer during financial hardship.
How long can I get student loan forbearance?
Forbearance is usually granted for up to 12 months at a time, and you can renew it if you still face hardship.
Does interest accrue during forbearance?
Yes, interest continues to accrue on all loan types during forbearance, and it may be added to your principal balance.
How do I apply for student loan forbearance?
You apply by contacting your loan servicer and submitting a forbearance request with proof of hardship.
What is the difference between forbearance and deferment?
Deferment is similar but often has interest benefits on subsidized loans, while forbearance always accrues interest.
