How Long Can You Forbear Student Loans
When you’re a student, the last thing you want to worry about is how long it’s going to take to pay off your loans. But if you’ve been out of school for a while and are still carrying a load of debt, it’s time to start looking at what options are available to you.
There are several ways to make payments, but not all of them can help you get rid of that debt as quickly as possible. Some plans allow for forbearance—a period during which no payments are due—but this only helps if you have enough income to cover the interest on your loan.
Other options include deferment and consolidation. Deferment allows you to pause payments for up to three years while consolidating allows you to combine all of your loans into one payment plan with one lender. Both options will allow you more flexibility in making payments and give you more time before deciding on whether or not consolidation is right for your situation.
It may seem like an overwhelming process, but there’s no reason why you shouldn’t explore all options available when considering how long can I forbear student loans.
How Long Can You Forbear Student Loans
With forbearance, you won’t have to make a payment, or you can temporarily make a smaller payment. However, you probably won’t be making any progress toward forgiveness or paying back your loan. As an alternative, consider income-driven repayment.
Student Loan Payment Pause Extended Through Aug. 31, 2022
On April 6, 2022, the U.S. Department of Education (ED) extended COVID-19 emergency relief for student loans through Aug. 31, 2022. The emergency relief includes the following measures for eligible loans:
a suspension of loan payments
a 0% interest rate
stopped collections on defaulted loans
Have questions? Find out what loans qualify and get additional information about the COVID-19 emergency relief for student loans.
Get Relief With Lower Payments on an Income-Driven Repayment Plan
If you’re having trouble repaying your loans due to circumstances that may continue for an extended period, or if you’re unsure when you’ll be able to afford to make your monthly loan payments again, a better option might be to change to an income-driven repayment plan. Income-driven repayment plans base your monthly payments on your income and family size. In some cases, your payment could be as low as $0 per month. They can also provide loan forgiveness if your loan is not paid in full after 20 or 25 years.
Always contact your student loan servicer immediately if you’re having trouble making your student loan payments.
If you’re seeking Public Service Loan Forgiveness (PSLF) or income-driven repayment forgiveness, forbearance will not allow you to make progress toward forgiveness.
Be Aware That Interest Might Accrue During a Forbearance
If you are granted a forbearance, you are still responsible for paying the interest that accrues during the forbearance period.
How It Works
During a forbearance, you can either pay the interest as it accrues, or you can allow it to accrue and be capitalized (added to your loan principal balance) at the end of the forbearance period. If you don’t pay the interest on your loan and allow it to be capitalized, the total amount you repay over the life of your loan may be higher. Unpaid interest is capitalized only on Direct Loans and Federal Family Education Loan FFEL Program loans. Unpaid interest is never capitalized on Federal Perkins Loans.
Request a Forbearance
Most types of forbearance are not automatic—you need to submit a request to your student loan servicer, often using a form. Also, for some types of forbearance, you must provide your student loan servicer with documentation to show that you meet the eligibility requirements for the forbearance you are requesting. Learn more about requirements and how to access request forms.
Understand Eligibility for a Forbearance
There are two main types of forbearance: general and mandatory.
General Forbearance
Your loan servicer decides whether to grant a request for a general forbearance. For this reason, a general forbearance is sometimes called a “discretionary forbearance.”
You can request a general forbearance if you are temporarily unable to make your scheduled monthly loan payments for the following reasons:
Financial difficulties
Medical expenses
Change in employment
Other reasons acceptable to your loan servicer
Loan Programs Eligible for General Forbearance
General forbearances are available for Direct Loans, Federal Family Education (FFEL) Program loans, and Perkins Loans.
Duration of a General Forbearance
For loans made under all three programs, a general forbearance may be granted for no more than 12 months at a time. If you’re still experiencing a hardship when your current forbearance expires, you may request another general forbearance. However, there is a cumulative limit on general forbearances of three years.
For more information, review the General Forbearance Request.
Mandatory Forbearance
If you meet the eligibility requirements for a mandatory forbearance, your loan servicer is required to grant the forbearance. You may be eligible for a mandatory forbearance in the following circumstances.
Note: The mandatory forbearances discussed below apply only to Direct Loans and FFEL Program loans unless otherwise noted.
AmeriCorps
You are serving in an AmeriCorps position for which you received a national service award
forbearance vs deferment
Both allow you to temporarily postpone or reduce your federal student loan payments.
The main difference is if you are in deferment, no interest will accrue to your loan balance. If you are in forbearance, interest WILL accrue on your loan balance.
If you have a loan, especially a student loan or a mortgage, there may come a time when you aren’t able to keep up with your payments. But there are options when it comes to repayment relief, including one called a forbearance and one called a deferment. Both can involve temporarily postponing or pausing (or temporarily lowering) loan payments.
But there can be a crucial difference between the two, and it’s whether the interest on the loan stops accruing (accumulating) or continues accruing while regular payments are on pause. That’s a big difference, and it can add up to a lot of money.
Luckily, we’re here to loan you our expertise—interest-free—and provide an easy-to-understand breakdown of exactly what both options mean, including specific examples of how each works in terms of mortgages and student loans.
⚡ Quick summary
The word forbearance commonly refers to a temporary pause on loan payments that usually involves the loan balance continuing to accrue interest. A deferment, on the other hand, typically involves a temporary pause on loan payments without interest continuing to accrue. However, different financial institutions may use these terms differently, especially in the different contexts of mortgages and student loans. Always read the fine print.
What is forbearance?
Forbearance is “a form of repayment relief granted by a lender that temporarily postpones payments due from a borrower, while interest on the loan typically continues to accrue.” Let’s break that down. The lender is the one providing the loan—the bank or institution loaning the money. The borrower is the one receiving the loan—the one responsible for paying it back.
When a borrower is not able to keep up with their regular payments, the lender may offer the option of a forbearance, meaning that the borrower can pause payments for a temporary period of time. But the terms of a forbearance usually require interest to keep accruing on the balance that’s owed. This means that a forbearance can result in an increase in the final amount required to be paid.
Let’s look at a simplified example involving student loans. Say you have $10,000 in student loans, and you’re paying a 1% interest rate per month. At the end of the first month of forbearance, the total loan amount you need to pay back will actually be $10,100, because the interest has continued to build up. And it will be even more with each subsequent month, as the interest rate is applied to the balance (in accordance with the specific terms of the loan).
Learn the basic language of loans with this review on using loan, loaned, lend, and lent.
Or, say that you have a $250,000 mortgage. Let’s keep it simple and set the interest at a monthly rate of 1%. Your lender may allow you to temporarily stop payments on your mortgage, such as after the loss of a job. At the end of the first month of a forbearance, your new balance will be $252,500, due to the accrued interest.
The terms of a forbearance vary for different types of loans and different lenders.
Outside of finance, forbearance has other, more general meanings related to self-control and refraining from doing things.
What is deferment?
In the context of loans, deferment often refers to a pause on payments during which interest does not continue to accrue. In other words, a deferment allows you to temporarily stop making payments on your debt without the interest continuing to pile up. The word deferral is sometimes used in the same way. Taking this option is sometimes called deferring a loan.
In the student loan and mortgage examples above, if you were granted a deferment of your loan payments, you would still owe the same amount ($10,000 or $250,000) whenever you were able to resume payments. Your loan would neither grow nor shrink—it would be temporarily frozen.
Sometimes, lenders use the word deferment in other ways. For example, it’s sometimes used to refer to an option that follows a forbearance, in which the skipped payments are set aside to be paid after the rest of the loan has been paid.
Like forbearance, the word deferment has other, more general meanings outside of finance, but it usually involves the postponement of something.
Our finances depend heavily on another set of terms worth discussing: inflation vs. deflation.
What is the difference between forbearance and deferment?
Forbearance and deferment can both refer to temporary pauses on debt payment, but forbearance usually involves the continued accumulation of interest, while deferment does not. If this is the case, and you have a choice between deferment and forbearance, it obviously makes sense to choose deferment when all other terms are equal.
However, the terms can be used differently by different lenders and for different types of loans. Sometimes, an option may involve both forbearance and deferment. And sometimes, such options come with other catches, such as a change in credit status. It’s always important to know the exact terms before entering into any agreement.