Forbearance is a temporary pause or reduction of your federal student loan payments. It is an option for borrowers who are facing financial hardship but do not qualify for an income-driven repayment plan or deferment. During forbearance, interest continues to accrue on all loan types, which means your balance will grow while payments are paused.
How Does Student Loan Forbearance Work?
When you enter forbearance, your servicer allows you to stop making payments or make smaller payments for a limited time. The most common type is general forbearance, which you can request for up to 12 months at a time. You can renew it, but total forbearance time is usually capped at three years.
Interest continues to accrue during forbearance on all loans, including subsidized loans. If you do not pay the interest as it accrues, it may be capitalized (added to your principal balance). This increases the total amount you owe and the interest you will pay over the life of the loan.
Types of Forbearance
There are two main categories of forbearance: general and mandatory. General forbearance is granted at the servicer’s discretion, while mandatory forbearance must be granted if you meet specific conditions.
| Type | Who Qualifies | Maximum Duration |
|---|---|---|
| General Forbearance | Financial hardship, illness, or other reasons approved by servicer | 12 months at a time, up to 3 years total |
| Mandatory Forbearance | Teaching loan forgiveness, medical or dental internship, National Guard duty, or payments exceeding 20% of gross income | 12 months at a time, up to 3 years total |
| Student Loan Debt Burden Forbearance | Monthly payments on all federal student loans are 20% or more of your gross income | Up to 3 years |
How to Apply for Forbearance
To request forbearance, you must contact your loan servicer directly. You can do this online, by phone, or by mail. You will need to explain your situation and provide supporting documents, such as medical bills or proof of unemployment.
Here are the general steps:
- Log in to your loan servicer’s website or call their customer service.
- Ask for a forbearance application form.
- Complete the form and attach any required documentation.
- Submit the form before your next payment due date.
- Keep a copy of everything for your records.
Pros and Cons of Forbearance
Pros
- Stops or reduces your monthly payments temporarily.
- Can help you avoid default during a short-term crisis.
- No credit score impact if you follow the terms.
Cons
- Interest continues to accrue, increasing your total debt.
- Capitalization can make your principal balance grow.
- Limited to three years total for most federal loans.
- Does not help with loan forgiveness or principal reduction.
Forbearance vs. Deferment vs. Income-Driven Repayment
Forbearance and deferment both pause payments, but deferment may not accrue interest on subsidized loans. Income-driven repayment (IDR) plans adjust your monthly payment based on income and family size, and they count toward loan forgiveness after 20 or 25 years. Forbearance is usually a short-term fix, while IDR is a long-term solution.
| Option | Interest Accrual | Duration | Loan Forgiveness |
|---|---|---|---|
| Forbearance | Always accrues | Up to 3 years | No |
| Deferment | No on subsidized loans | Varies by type | No |
| Income-Driven Repayment | Accrues, but payments may be $0 | 20-25 years | Yes, remaining balance forgiven |
When Should You Use Forbearance?
Forbearance is best for short-term financial emergencies, such as medical bills, temporary unemployment, or natural disasters. If your hardship lasts more than a year, consider an IDR plan instead. Also, if you have subsidized loans, deferment may be a better option because it stops interest on those loans.
Before choosing forbearance, calculate how much interest will accrue. Use a student loan calculator to see the impact. If you can pay at least the interest each month, you can avoid capitalization.
Actionable Tips for Managing Forbearance
- Always ask your servicer if you qualify for an IDR plan before requesting forbearance.
- If you enter forbearance, try to pay the interest monthly to prevent capitalization.
- Keep track of your total forbearance time to avoid exceeding the three-year limit.
- Reevaluate your financial situation every six months to see if you can resume payments.
- Contact your servicer immediately if your hardship ends early.
How Forbearance Affects Your Credit and Future Payments
Forbearance itself does not hurt your credit score, as long as you make no late payments. However, the increased balance may affect your debt-to-income ratio, which could impact future borrowing. After forbearance ends, your monthly payment may increase slightly because the principal is higher. You can request a new repayment plan if needed.
Also, forbearance does not count toward Public Service Loan Forgiveness (PSLF). If you are pursuing PSLF, you must be in an IDR plan and making qualifying payments. Forbearance months do not qualify for PSLF.
Final Summary
Forbearance is a valuable safety net for temporary financial hardship, but it is not a long-term solution. Interest accrues and can be capitalized, increasing your total debt. Before using forbearance, explore deferment and income-driven repayment options. If you do use forbearance, keep track of your time, pay interest if possible, and return to regular payments as soon as you can.
Frequently Asked Questions
How long can I stay in student loan forbearance?
You can typically stay in forbearance for up to 12 months at a time, with a total limit of 36 months over the life of your loan.
Does forbearance stop interest from accruing on my student loans?
No, interest continues to accrue on all loans during forbearance, including subsidized loans, and may be added to your principal balance if unpaid.
Can I get forbearance if I am in default?
No, forbearance is not available for loans that are already in default; you would need to work with your servicer on loan rehabilitation or consolidation options.
Is forbearance the same as deferment?
No, deferment may not accrue interest on subsidized loans, while forbearance always accrues interest on all loan types.
Will forbearance hurt my credit score?
Forbearance itself does not hurt your credit score if you make no late payments, but the increased loan balance can affect your debt-to-income ratio.
