Sometimes life is unpredictable, and emergencies happen. If you’re going through a hard time, need medical treatments, or were recently laid off, paying your student loans might be an added financial stress you don’t need right now. If you’re in that position, you do have options. One of them is student loan forbearance.
Student loan forbearance is when your servicer allows you to pause payments for up to 12 months while you get back on your feet. Keep reading. We’ll explain what student loan forbearance is, how it differs between federal and private loans, and the situations where it (or might not) be the best option.
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What is student loan forbearance?
Student loan forbearance is when your student loan servicer allows you to pause your monthly student loan payments due to financial hardship, natural disasters, medical issues, or other approved financial setbacks. It’s a better option than skipping payments because forbearance doesn’t damage your credit score.
However, interest still accrues on your loan during forbearance, which can cause your balance to increase while you pause payments. If possible, making interest-only payments can help reduce long-term costs. You can get federal student loan forbearance for up to 12 months, and some private lenders offer it too.
How student loan forbearance works
If you can’t make your student loan payments, you can apply for student loan forbearance. If your servicer or lender approves you for this, you’ll pause your payments for a while. During this time, your student loan account remains in good standing. Because the missed payments are approved, your account will not be delinquent.
Once your forbearance ends, your payments will resume. Because interest during student loan forbearance still accrues even if you’re not required to make payments, it’s wise to use a student loan forbearance calculator to determine how much your balance will increase if you decide to pursue this option:
Forbearance with private vs. federal student loans
| Forbearance info | Federal student loans | Private student loans |
|---|---|---|
| Policymaker | Federal government | Each lender makes its own policy |
| Duration | Typically up to 12 months | Varies by lender |
| Does interest accrue? | Yes | Yes |
| Eligiblity | Available to those with financial hardship; administrative forbearance may be applied automatically | Each lender has its own requirements; may require proof of financial hardship |
Federal student loan forbearance
Federal student loan forbearance is available to those who meet specific criteria, such as financial hardship, unemployment, or medical issues. Usually, you can get up to 12 months of federal student loan forbearance. If you are still having financial difficulties after 12 months, you can apply for more time.
Sometimes, the Department of Education automatically initiates an administrative forbearance due to servicer errors, processing delays, or pending court cases related to student loans.
Private student loan forbearance
Private lenders are not required to offer forbearance or hardship programs. However, some do have their own student loan forbearance policies. The eligibility terms and requirements vary by lender. Some lenders offer the ability to skip a payment, while others may allow several months of forbearance with proof of financial hardship.
If your private loans are already delinquent or in default and your lender isn’t offering meaningful hardship relief, refinancing may be a better path than repeated forbearance.
For example, Yrefy specializes in refinancing defaulted private student loans, even for borrowers with low credit scores or income. It offers fixed rates from 1.00% to 6.00% APR and doesn’t require a minimum credit score.
Yrefy doesn’t refinance federal loans, but it can provide a structured repayment option for private loans when traditional lenders won’t.
3 types of forbearance
Your forbearance might be one of three types:
General forbearance
General student loan forbearance is the most common type. This is when lenders allow you to pause payments when you’re experiencing eligible financial hardship. It can apply to federal or private student loans.
Mandatory forbearance
Mandatory forbearance only applies to federal loans. It means that, by law, your student loans will enter forbearance if you meet certain qualifications. For example, if you serve in AmeriCorps or you’re a National Guard member who has been activated, you qualify for mandatory forbearance.
Administrative forbearance
This only applies to federal student loans. It’s when a loan servicer automatically activates forbearance, often due to processing delays or legal reasons.
When to use student loan forbearance
Here are some situations where it may make sense to use student loan forbearance.
- You recently lost your job or got laid off, but you expect to be employed again soon.
- You have a temporary medical issue or need to pause payments to pay for a medical bill.
- Getting forbearance will help you avoid student loan delinquency or default.
- Your financial hardship is temporary.
- You want to pause student loan payments while you look for a new lender or a new payment plan.
- You’re waiting for disability or unemployment benefits to start.
- You only need breathing room for a short time to avoid missing a payment and damaging your credit.
Loan forbearance will almost always make the situation worse, since interest continues to accrue. So either you will have a larger balance once payments restart, or you are still paying interest during the forbearance, which, depending on the period of your loan repayment, could still be the majority of what is being paid.
Typically, I would say a loan forbearance should only be used for short-term financial issues where making the payments would lead to not being able to pay other bills and/or having to start taking on higher-cost credit card debt. If you have other assets and solid credit, refinancing your student loan at a lower interest rate may make sense, or evaluating a personal loan may be a better option.
When forbearance doesn’t make sense
Here are some times when student loan forbearance may not make sense.
- You’re close to earning Public Service Loan Forgiveness.
- You want to pursue other types of student loan forgiveness.
- You qualify for an income-driven repayment plan that lowers your payment.
- Your financial hardship will be long-term.
- You qualify for deferment instead.
- You don’t fully understand what forbearance is and how it will affect the lifetime interest on your loan.
Alternatives to forbearance
Forbearance is not your only option. Here are a few alternatives to consider before applying for forbearance.
Deferment
It’s easy to confuse deferment and forbearance because both let you pause payments. The difference is how interest works.
- During forbearance, interest always accrues.
- During deferment, interest may not accrue on certain federal loans, such as Direct Subsidized Loans, if you qualify.
Deferment is typically available for situations like returning to school, unemployment, or economic hardship. Because it can prevent your balance from growing, it’s often the better option if you’re eligible.
Income-driven repayment
If you have federal student loans, you have several repayment options. One of them is income-driven repayment, which caps payments based on your income and family size. As a result, some borrowers can reduce their payments, sometimes down to $0.
Student loan refinance
Another option is to refinance your student loans. That means you get a new private student loan and use it to pay off your current student loan. Borrowers do this because refinancing can sometimes lower their payments and interest rate.
If you refinance federal student loans into private student loans, you will lose several government protections and the ability to have your loans forgiven if you qualify.
Think this might make sense for you? Check out our list of the best student loan refinance companies.
If your private student loan is delinquent or already in default, repeated forbearances may only delay the problem while interest continues to accrue. In that case, refinancing with a lender that specializes in distressed borrowers may be more effective.
Yrefy, for example, refinances defaulted private student loans without a minimum credit score requirement and offers super-low fixed rates. It charges a 5% origination fee and can’t refinance federal loans, but it may offer a realistic reset option for borrowers who no longer qualify for traditional hardship programs.
How to apply for student loan forbearance
Federal loan forbearance
- Log in to Studentaid.gov, and locate the name of your student loan servicer.
- Contact your servicer by phone to explain your personal situation.
- Ask your servicer about eligibility options and the type of forbearance it offers.
- If eligible, submit the required forms or necessary financial hardship documentation.
- Continue making payments until your servicer confirms in writing that your loans are in forbearance.
Private loan forbearance
- Continue making payments until your lender confirms in writing that your loans are in forbearance.
- Look up your lender’s policies online to see whether it offers forbearance options.
- Contact your lender by phone or via a secure online message to find out whether you are eligible.
- If eligible, submit proof of financial hardship and any other documentation your lender requires.
Article sources
At LendEDU, our writers and editors rely on primary sources, such as government data and websites, industry reports and whitepapers, and interviews with experts and company representatives. We also reference reputable company websites and research from established publishers. This approach allows us to produce content that is accurate, unbiased, and supported by reliable evidence. Read more about our editorial standards.
- CFPB, What Is Student Loan Forbearance?
- CFPB, Is Forbearance or Deferment Available for Private Student Loans?
- Federal Student Aid, Student Loan Forbearance
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About our contributors
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Written by Catherine CollinsCatherine Collins is a personal finance writer and author with more than 10 years of experience writing for top personal finance publications. As a mother to boy/girl twins, she is passionate about helping women and children learn about money and entrepreneurship. Cat is also the co-host of the Five Year You podcast.
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Edited by Kristen Barrett, MATKristen Barrett is a managing editor at LendEDU. She lives in Cincinnati, Ohio, with her wife and their pack of senior rescue dogs. She has edited and written personal finance content since 2015.
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Reviewed by Rand Millwood, CFP®Rand Millwood, CFP®, CIMA®, AIF®, is a partner at Guardian Wealth Partners in Raleigh, North Carolina. His firm assists clients of all ages and areas of life (with a strong background in the medical and legal fields) in planning, investing, and preparing for retirement and other financial goals.