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Forbearances

Borrowers who don't meet the criteria to obtain a deferment may qualify for a forbearance. Like a deferment, a forbearance is a period of time during which the borrower's payments are temporarily reduced or suspended. Unlike deferments, forbearances, for the most part, are granted at the discretion of the servicer.

  • Borrowers must apply to their loan servicer for a forbearance - they are not granted automatically.
  • For the most part, forbearances are granted at the discretion of the loan servicer.
  • However, mandatory forbearances are prescribed by the federal government in some cases including:
    • Student loan debt exceeds 20 percent of a borrower's gross monthly income.
    • Borrowers are engaged in a medical or dental internship or residency program.
    • Borrowers are performing a type of service that qualifies them for partial repayment under the Department of Defense Student Loan Repayment Program.
    • Borrowers are serving in national service positions under the National and Community Service Act of 1993.
  • The federal government does not pay the interest on loans when they are in forbearance status. (For that reason, borrowers should continue to pay interest during the forbearance to avoid it from being capitalized at the end of the forbearance.)