Federal Student Loan Forbearance

Forbearance is a way to temporarily postpone or reduce your student loan repayment for a set period of time. This typically takes place because the borrower is experiencing financial difficulty, but can be requested for any of the following reasons:

• Unemployment
• Partial Disability
• Other documented hardship

Even if the borrower is ineligible for a deferment, he/she can still receive a forbearance. Unlike deferment, it doesn't matter if these loans are subsidized or unsubsidized because interest still accrues, and the borrower is responsible for the interest repayment.

The borrower's loan holder can grant forbearance in intervals of up to 12 months at a time and for up to a total of 3 years. In order to enact federal student loan forbearance, it must be applied for through the loan servicer and payments must still be made until forbearance has been granted.

Federal PLUS Loan Forbearance

Federal PLUS Loan borrowers normally have the same eligibility requirements and procedures for requesting a forbearance that Stafford Loan borrowers do. However, because all PLUS Loans are unsubsidized, interest will be charged during periods of forbearance.

Interest Rates and Federal Student Loan Forbearance

In addition, federal student loan forbearance does NOT lock interest rates. Even though loans are deferred, they can still have variable rates unless a loan is being deferred that was also consolidated (which has a fixed interest rate). Stafford loans borrowed prior to July 1, 2006 have variable interest rates, while Stafford loans borrowed after July 1, 2006 have fixed interest rates. If Stafford loans have been consolidated then the interest rate will remain fixed. Forbearance has no effect on the interest rate of a loan.