Federal Student Loan Forbearance
Borrowers that aren’t eligible for federal loan deferment can request federal student loan forbearance to temporarily postpone or reduce the student loan repayment for a set period of time.
If a borrower is unemployed, has a partial disability or can document a hardship, they’re eligible for forbearance. Until the borrower has been approved for forbearance, they must continue to make payments, otherwise the loan may go into default.
Types of Forbearance
There are two types of forbearances — Discretionary and Mandatory.
Discretionary Forbearance: Discretionary forbearances are determined by your loan servicer on a case-by-case basis for reasons such as financial hardship or illness.
Mandatory Forbearance: Your loan servicer is required to grant mandatory forbearances if you meet the criteria for one of the following cases:
- You are serving in a medical internship or residency program
- You are serving in and received an award for a national service position
- You are a National Guard member but do not qualify for a military deferment
- You are teaching in a program that qualifies for teacher loan forgiveness
- Your monthly payments are more than 20% of monthly gross income
- You qualify for partial loan repayment under the Department of Defense's repayment program
Loan servicers can grant forbearance in intervals of up to 12 months for a period of up to 3 years, according to the U.S. Department of Education.
Impact on Interest Rates
Forbearance has no effect on the interest rate of a loan and interest will continue to accrue during periods of forbearance. This applies to all federal loans, including Subsidized Stafford Loans which do not accrue interest during periods of deferment.
Borrowers must contact the loan servicer to find out how they can apply for forbearance. For Perkins Loans, the borrower must contact the school that created the loan. If a borrower doesn’t know who the loan holder is or what type of loan they have, the National Student Loan Data System (www.NSLDS.ed.gov) will have a record of those details (note: to use this service, the borrower needs their Federal Student Aid PIN). For Direct Student Loans, borrowers can find downloadable forbearance request forms on our student loan forms center.