If you’re having difficulty making payments on your federal or private student loans, one option to consider is putting your loans into forbearance. Forbearance allows you to pause payments, giving you more room in your budget and keeping your loans out of default until you’re ready to resume payments again.
The federal government and private student loan companies have specific rules for when you can put loans into forbearance and how long loans can stay there. For instance, if you’ve been a federal loan borrower throughout the COVID-19 pandemic, you’ve been eligible for “administrative forbearance,” where student loan payments are paused and interest hasn’t accrued.
With traditional forbearance and deferment, the interest keeps accruing, so you’ll end up with a higher loan balance when you start paying your loans back. Because of this, it’s important to understand the pros and cons of student loan forbearance, and how it differs from loan deferment, so you can make the right choice.
In this guide:
- What is forbearance?
- Is forbearance different for federal and private student loans?
- Types of federal loan forbearance
- How do I apply for forbearance on my federal student loans?
- Types of private loan forbearance
- How does forbearance affect the total cost of my student loan?
- Pros and cons
- Alternatives to forbearance
- FAQ
What is forbearance?
When loans are put into forbearance, borrowers aren’t required to make their monthly payments for a specified period. Putting loans into forbearance can make sense if you’re facing financial hardship, such as maternity leave, medical leave, or job loss.
In some cases, your student loan servicer must allow you to put your loans into mandatory forbearance as long as you meet certain requirements. With others, the lender will evaluate your forbearance request before approving it. The rules for when you can put your loan into forbearance—and how long your loan can stay there—also depend on whether you have federal or private loans.
Your lender continues to charge interest on your loans while in traditional forbearance, which means unpaid interest is capitalized and added to your principal loan balance unless you make interest-only payments. If you don’t, you end up paying interest on interest.
The exception is if you qualify for a federal student loan repayment pause, such as the one implemented in 2020 as a result of the COVID-19 pandemic. Eligible federal borrowers have been in administrative forbearance since March 13, 2020, during which time no monthly payments are due, and no additional interest is accruing.
Is forbearance different for federal and private student loans?
Your forbearance options will be different depending on whether you have federal or private student loans.
The major differences include:
- All federal loans allow forbearance. All federal loan borrowers are eligible for forbearance, as long as they can show evidence of financial hardship.
- All federal loans follow the same rules. For federal student loans, forbearance is a standard option, and the same guidelines apply to all federal loans.
- Private loans have their own rules. Each private student lender has discretion regarding whether, when, and for how long forbearance is permitted. For example, Earnest student loan borrowers can qualify for forbearance lasting one to 12 months as long as they’ve made at least three consecutive and on-time payments. But other lenders may not allow for forbearance at all.
- Federal loans can be in forbearance for a longer time. In general, federal borrowers have up to 12 months of forbearance, but you can extend it in 12-month increments for up to three total years.
- Federal borrowers may qualify for income-based forbearance. Unlike with private loans, you may be able to force a mandatory forbearance of your federal student loans if your monthly payment accounts for too much of your income.
Because it’s easier to put federal loans into forbearance, new borrowers should always exhaust their federal student loan options first before taking out private student loans.
Want to figure out how much putting your loans into forbearance will cost? Check out our Student Loan Forbearance Calculator.
Types of federal loan forbearance
The two types of forbearance are general and mandatory.
| General forbearance | Mandatory forbearance |
| Applies to all federal loan types. | May only apply to certain loans in specific hardship cases. |
| Can be discretionary according to the loan servicer. | Servicers are required to grant forbearance if you meet certain requirements. |
| Offered in 12-month increments but may be renewed for up to three cumulative years. | Offered in 12-month increments but may be renewed with no established limit. |
| Available for Direct Loans, Perkins Loans, and FFEL loans. | Certain eligibility categories may only apply to Direct Loans and FFEL loans. |
General forbearance
When you apply for general forbearance, your loan servicer has the discretion to grant or deny your request. You can qualify for general forbearance for Perkins Loans, Direct Loans, and loans through the FFEL Program if you:
- Endure a financial hardship
- Lose your job or have a significant change in employment
- Have unexpected or significant medical expenses
- Experience certain eligible situations
Servicers grant general forbearance for no more than one year at a time. If you’re still having financial issues at the end of 12 months, you must reapply for forbearance with your lender. You can’t put your loans into general forbearance for more than three years over the life of the loan.
Mandatory forbearance
If you can meet the qualifying requirements for mandatory forbearance, your loan servicer must grant your request. You’ll still need to apply, but your lender doesn’t have the discretion to deny you.
You can qualify for mandatory forbearance if:
- You’re in an eligible medical internship, dental internship, or residency program.
- The total amount of your monthly payment for all student loans equals 20% or more of your gross income for up to three years.
- You are serving in an AmeriCorps position for which you received a national service award.
- You’re doing teaching work that qualifies you for teacher loan forgiveness.
- You qualify to have your loans partially repaid under the U.S. Department of Defense (DOD) Student Loan Repayment Program.
- You’re a National Guard Member who is ineligible for a military deferment, and your unit has been activated by the governor.
The specific rules for mandatory forbearance differ by loan type. For example, Direct Loans and FFEL Program Loans only qualify in the following instances:
- You’re in a dental, medical, or residency program.
- You’re a National Guard Member.
- You qualify for teacher loan forgiveness.
- You qualify for DOD loan repayment.
However, you can also qualify for mandatory forbearance for Perkins Loans if your payments exceed 20% of your gross income.
Mandatory forbearance can also be granted for a maximum of 12 months, after which you will need to reapply for another mandatory forbearance if you still qualify.
How do I apply for forbearance on my federal student loans?
If you have federal student loans and believe forbearance is right for you, here’s how to apply and request a temporary repayment pause.
- Determine your loan servicer. You’ll need to contact your loan servicer in many cases, so you’ll want to first find out who it is. You can do this by logging into your StudentAid.gov account and visiting the “My Loan Servicers” section of the platform.
- Contact the servicer. Depending on your situation and reason for requesting forbearance, you may need to reach out to your loan servicer(s) first. This allows you to explain your situation and determine which options are available.
- Determine whether you need general or mandatory forbearance. Does your loan payment account for more than 20% of your discretionary income? Are you a National Guard member who has been called up to active service? These (and other) reasons may qualify you for mandatory forbearance, while other borrowers may have a good case for general forbearance instead.
- Apply for forbearance. Once you know what sort of forbearance you qualify for, it’s time to submit your application. Some situations have a standard form to fill out and submit, such as when borrowers’ payments result in an undue burden. In other instances, your servicer may have its own form or require you to request forbearance over the phone.
Types of private loan forbearance
While forbearance is one of the biggest benefits offered to federal loan borrowers, certain private lenders also provide forbearance options. It’s important to note not all lenders offer these options, and they’re never guaranteed. Exhausting your federal loan options before taking out private loans is always wise.
Private lenders may offer:
- Short-term forbearance due to financial hardship
- One-off or systematic forbearance options, such as an annual “skip a payment” option or similar
- Long-term forbearance for eligible borrowers
- No forbearance options at all
How do I apply for forbearance on my private student loans?
Every private lender has its own forbearance application process, so it’s important to check with your lender to determine what it requires.
The process often involves:
- Calculating how much you owe each month and how that fits into your budget or financial situation.
- Determining whether you meet the requirements, which can include loan length and recent payment history.
- Filling out your lender’s application. (This may be available online if the lender has a web platform.)
- Contacting the lender—by phone or email—to bring up the hardship and submit your forbearance request.
- Providing evidence for the hardship, depending on your situation and what the lender requires.
How does forbearance affect the total cost of my student loan?
Depending on your loan type, why you go into forbearance, and how long your loan payments are paused, this may affect the total amount you owe on the debt.
With federal and private loan forbearance, for example, interest will continue to accrue on the balance owed while the debt is in forbearance. This interest will capitalize, or be added back to the loan balance, which will then continue accruing more interest on top of that interest.
Some private lenders may charge fees or added costs, so it’s important to check with your lender to see how much this option will cost.
Certain federal programs may not charge new interest to eligible borrowers, saving them money while the loans are paused. This is the case with the current federal student loan pause, enacted in March 2020. At the time of writing, it’s set to expire in mid-2023.
Pros and cons of student loan forbearance
Before opting into forbearance on your federal or private student loans, it’s important to understand the advantages and disadvantages of this feature.
Pros
-
Flexibility and relief in your budget if you encounter financial hardship.
-
Avoid damaging your credit score by missing payments.
-
Avoid defaulting on your loan, which can lead to legal action.
Cons
-
Extend the overall life of your loan.
-
Interest continues accruing in most cases.
-
Because interest is capitalized when your loans are in forbearance, the lender adds it to the principal balance, which means you could end up paying interest on interest.
-
Not available on all loans.
If you qualify for deferment instead of forbearance, you can prevent at least some interest from accruing.
Alternatives to forbearance
If you’re having trouble making your student loan payments, you have alternatives to forbearance:
- Change your loan repayment plan. Several federal loan repayment options cap your monthly loan payments as a percentage of your income. You could switch to one of these plans to lower your monthly payments and get more room in your budget.
- Consolidate your student loans. If your federal loans are eligible, consolidation could open the door to an extended repayment plan of up to 30 years. Extending your repayment terms can also result in lower payments. (Learn more: Student Loan Consolidation Guide.)
- Refinance your student loans. Refinancing could lower your interest rate and monthly payment. This may be a better option for a private student loan because refinancing federal loans means giving up several important borrower benefits. (Learn more: Refinance Student Loans Guide.)
- Deferment. Student loan deferment is different from forbearance, although the two programs are often confused because both allow you to take a break from student loan payments. The major difference is when you defer many types of federal loans, you aren’t responsible for paying the interest that accrues. (Qualifying for this option may be more difficult.)
You should consider all alternatives before deciding whether student loan forbearance is best for you.
View our guide to student loan repayment plans.
FAQ
When does the federal student loan forbearance end?
The federal student loan forbearance period began on March 13, 2020, and has been extended multiple times.
It is now set to expire on June 30, 2023. If it isn’t extended by that date, payments will resume 60 days after the expiration of this latest extension.
Will the Biden administration extend federal student loan forbearance?
The federal student loan pause is set to expire no later than June 30, 2023, unless the courts make a final decision on student loan forgiveness legislation prior to that date. If no alternate resolution occurs by mid-2023, loan payments will resume 60 days after the expiration of the pause.
While the Biden administration could extend the forbearance period again, we can’t know whether that will occur, or whether the current loan forgiveness legislation will be upheld or overturned.