Forbearances are another way to postpone payments. Under forbearance, interest accrues on all loans and if not paid, is capitalized on to the principal of your loan. This is why we generally advise this as a last resort to prevent default. It’s a short term solution only and will often increase your monthly payment and total amount paid over time.
There are several types of forbearances. Some are used at the borrowers request and only if the borrower is eligible. Some, called mandatory or administrative forbearances, are applied automatically in certain circumstances.
The most common forbearance is called a voluntary forbearance. This is applied at the loan holders discretion, upon the borrowers request. It can be used up to 12 months at a time and can be applied retroactively as long as the loan is not in default. Most loan holders allow a total of 36 months of this type of forbearance per loan. Some offer more, some less. In most cases, you can request a voluntary forbearance over the phone. Loans that are in default and have been transferred to a collection agency or guarantor are never eligible for any type of forbearance. Forbearance rules are generally the same for both Federal Family Education Loan Program loans and Direct Loans.
|Type||Eligibility||How to Apply||Length of Time Allowed|
|Voluntary||Based on the borrowers request and loan holders discretion||Borrower can request over the phone. Form may be required for back to back forbearances||Up to 12 months per occurrence. Total amount allowed determined by loan holder. Generally 36 months|
|Title IV Excessive Debt||Borrowers loan payments are 20% or more than the borrowers or endorsers total monthly income||Borrower must request the loan holders application and submit proof of income and total federal student loan debt||Up to 12 months per occurrence for a total of 36 months.|
|Administrative forbearance||Coming soon|
|Disaster forbearance||Granted at the borrowers request when the borrowers address is listed in a disaster area declared by the President of the United States or the state governor||Contact all of your loan holders. No application required.||Generally three months|
|Mandatory Forbearances||Coming soon|