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If you have federal student loans, there are two main types of forbearance—general forbearance and mandatory forbearance—that can be offered in a variety of situations. Private lenders may also offer forbearance, though don't expect as much generosity compared to federal loans.
Here's what you need to know about how forbearance works and the different types that may be available to you.
What Is Student Loan Forbearance?
Student loan forbearance allows you to pause or reduce your monthly payments for a set period of time (anywhere from one to 12 months), making it worth considering if you're experiencing short-term financial hardship.
It's important to note that forbearance isn't the same as deferment, which may apply in other situations and can provide more protections—more on that later.
Types of Student Loan Forbearance
Depending on the type of student loans you have and your situation, the types of forbearance that are available to you can vary. With that in mind, here's what you need to know about your options.
General Forbearance
Also called discretionary forbearance, this type of relief is provided at the discretion of your federal student loan servicer.
You can apply for general forbearance if you have direct loans, Federal Family Education Loan (FFEL) program loans or Perkins loans, and you're experiencing any of the following situations:
- Financial difficulties
- Medical expenses
- Changes in employment
- Other reasons acceptable to your loan servicer
If you're eligible, you can pause or reduce your payments for up to 12 months at a time. If you're still having financial troubles when your initial forbearance period ends, you can apply for another forbearance period. Overall, there is a cumulative three-year limit.
Mandatory Forbearance
Your student loan servicer is required to grant your request for a payment pause or reduction with mandatory forbearance, but it's not automatic. To qualify for this type of forbearance, you must have direct loans or FFEL loans and meet one of the following criteria:
- AmeriCorps: You're serving in a position with the volunteer agency for which you've received a national service award.
- Department of Defense Student Loan Repayment Program: You're eligible for the loan repayment assistance program and want to pause or reduce your payments while you complete your minimum three-year service obligation.
- Medical or dental internship or residency: You're serving in an eligible program and meet other basic requirements.
- National Guard duty: You're a member of the National Guard and have been activated by your governor, but you don't qualify for military deferment.
- Student loan debt burden: Your total monthly federal student loan payments equal 20% or more of your gross monthly income. This option is also available to Perkins loans borrowers.
- Teacher loan forgiveness: You're eligible for the Teacher Loan Forgiveness program and want to pause or reduce your payments while you complete a portion of your five-year service obligation.
As with general forbearance, mandatory forbearance can be granted for periods of up to 12 months at a time, with a cumulative limit of three years.
Private Student Loan Forbearance
Some private student loan companies offer forbearance, while others don't. In general, private lenders don't openly spell out their forbearance terms, opting instead to grant a payment pause on a case-by-case basis.
As a result, you'll need to contact your lender to learn about your options. Keep in mind, though, that it's unlikely that a private lender will offer the same generosity as the federal government.
Pros and Cons of Student Loan Forbearance
While forbearance can provide much-needed relief, there are some potential pitfalls to consider before you submit your request. Here are some advantages and disadvantages to keep in mind:
Pros
- Can relieve budget pressure: If you've lost your job, you have some costly medical bills or you're experiencing another drastic financial situation, putting a pause on your student loans payments can give you some more breathing room to provide for your basic needs.
- Can help you avoid delinquency and default: Falling behind on your student loan payments or other bills can damage your credit. If you enter default, you may also end up with a host of new negative consequences, such as collection fees and wage garnishments. If you're at risk of missing even one payment, forbearance can give you some time to get back on your feet.
- Doesn't negatively impact credit: While your loans are in forbearance, your loan servicer or lender won't report missed payments to the credit bureaus.
Cons
- Interest will continue to accrue: Regardless of your reason for requesting forbearance, interest will continue to accrue on your loans. In contrast, borrowers with federal subsidized loans who request deferment won't accrue interest during their deferment period.
- Not a permanent solution: While it's possible to get up to three years' worth of forbearance on federal loans, you won't get permanent relief. If your financial situation doesn't improve, you could just be delaying the inevitable.
- No guarantee you'll qualify: Unless you meet the requirements for mandatory forbearance on a federal loan, there's no guarantee that your loan servicer or lender will offer relief.
How to Apply for Student Loan Forbearance
The process for applying for student loan forbearance differs for federal and private loan borrowers. If you have private student loans, call your lender's support team to find out what your options are and how to apply.
With federal loans, however, the process is more straightforward:
- Identify the type of forbearance you qualify for.
- Download and fill out the form for that specific type of forbearance.
- Gather any documents that support your request.
- Submit your request form and documentation to your loan servicer.
Alternatives to Student Loan Forbearance
While forbearance may appear to be a simple solution for your financial situation, it's important to consider all of your options before you apply. Here are some potential alternatives:
- Income-driven repayment plans: The U.S. Department of Education recommends looking into income-driven repayment plans before requesting forbearance. These plans can reduce your monthly payments to as low as $0. You can even qualify for forgiveness after 10 to 25 years, depending on which plan you choose and your original student loan balance.
- Deferment: If you're returning to school, you've lost your job or you qualify for other types of federal loan deferment, you may be able to get some relief that better aligns with your needs. Additionally, the government will pay any interest that accrues on your subsidized loans.
- Consolidation: If you have federal student loans, you may be able to extend your repayment term to up to 30 years with direct loan consolidation. While a longer term will result in more total interest charges, it can reduce your payment to a more affordable level for a long period of time.
- Refinancing: If you have federal student loans, refinancing your loans with a private lender likely doesn't make sense in your situation because you'd lose access to the federal government's generous relief options. But if you have private loans, student loan refinancing could help you secure a lower interest rate or monthly payment.
The Bottom Line
If you're struggling with student loan payments, forbearance is just one of many relief options that are available to you, especially if you have federal student loans. But while forbearance can offer temporary relief, it's important to also consider the potential problems it can create for your situation.
Before you apply for forbearance, carefully research all of your options to ensure that you choose the best path forward for you. Once your forbearance period begins, monitoring your credit can help you make sure your student loan payments are being reported accurately.