Apply for a forbearance

What is forbearance?

Forbearance is a temporary postponement or reduction of loan payments because of the borrower’s financial difficulties. Forbearance also may be an extension of the repayment period. During forbearance, you’re charged interest regardless of whether your loan is subsidized or unsubsidized. If you don’t pay the interest, it accrues and may be capitalized in the case of Federal Direct Loans.

The types of forbearance, the conditions under which it’s granted, and the time limits vary significantly among loan programs. You are not granted forbearance automatically; you must request it from your loan servicer(s) and you may have to provide documentation to support your request.

Some of the conditions under which you might be granted forbearance include:

• Being unable to pay due to poor health or other unforeseen personal problems
• Serving in a medical or dental internship or residency
• Serving in a position under the National Community Service Trust Act of 1993
• Being obligated to make payments on certain federal student loans that are equal to or greater than 20 percent of your monthly gross income.

Generally you are granted forbearance for periods up to 12 months at a time for a maximum of three years.

Unlike deferment, which you’re entitled to receive, the lender does not have to grant forbearance except in certain mandatory circumstances. In most cases, lenders are willing to work with you if you show you’re willing but temporarily unable to repay your debt.

Important things to remember

• Forbearances vary among loan programs.
• Under most circumstances you must request forbearance by completing a form and providing certification.
• You must continue to make payments on the loan until you’re notified that the forbearance was approved.
• Forbearance provisions are subject to change, so keep in touch with your loan servicer(s).