Federal student loan forbearances will temporarily postpone repayment of principle balance and interest once your student loan payments have started. Although student loan payments are stopped, the student loan balance will continue to incur interest. You will have the option of making interest-only payments during the forbearance period. If not, the incurred interest will be capitalized into the principle of the student loan. Below you’ll find answers to some of the most common questions individuals have about loan forbearance.
1. Applying for a Student Loan Forbearance
Applying for student loan forbearance is simple. The majority of federal student loan lenders offer websites which service a variety of options and allow students to download and print a forbearance application. The Student Loan Forbearance application can be either mailed to the lender or faxed. Students may also request forbearance by contacting an account representative for the lender.
2. How Long Does Federal Student Loan Forbearance Last
Student loan forbearances are for a maximum of twelve months. At the conclusion of the forbearance period, students who require an extension may apply for another twelve month forbearance period.
3. What is the Difference between Federal Student Loan Forbearance and Deferment
Student Loan Deferment is an option of delaying loan repayment. Before a student loan is deferred, students must meet a certain criteria. Not all student loans are eligible for deferment so you will have to check with your lender on your specific situation. Some reasons for student loan deferment may include continuing student education, unemployment, financial hardships, illness, military duty, etc…
What is the Difference between Federal Student Loan Forbearance and Loan Forgiveness?
Student loan forgiveness, or student loan cancellation involves having 100%, or a portion of the student loan debt forgiven. To qualify, students must meet loan forgiveness requirements. For example, teachers may qualify for loan forgiveness under certain circumstances.