College Savings Student Loan Forbearance: A Definition and Overview Read the Article Open Share Drawer Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on Tumblr (Opens in new window)Click to share on Pinterest (Opens in new window)Click to share on LinkedIn (Opens in new window) Written by Mint Published May 27, 2022 4 min read Advertising Disclosure The views expressed on this blog are those of the bloggers, and not necessarily those of Intuit. Third-party blogger may have received compensation for their time and services. Click here to read full disclosure on third-party bloggers. This blog does not provide legal, financial, accounting or tax advice. The content on this blog is "as is" and carries no warranties. Intuit does not warrant or guarantee the accuracy, reliability, and completeness of the content on this blog. After 20 days, comments are closed on posts. Intuit may, but has no obligation to, monitor comments. Comments that include profanity or abusive language will not be posted. Click here to read full Terms of Service. Student loan forbearance is a temporary suspension or decreased rate on your student loans. Many people became familiar with student loan forbearance during the COVID-19 pandemic, during which many student loan payments were halted or cut. Navigating student loans can be a tricky business as it is. But if a lower interest rate piques your interest, we’ve put together a guide to what student loan forbearance means and how it works. What is Student Loan Forbearance? Student loan forbearance means you’ll get some reprieve from your loan payments for a time. This could mean your monthly payment is reduced or even stopped altogether for up to one year. For the most part, forbearance isn’t an automatic process. You’ll have to contact your loan provider and fill out a form to request it. From there, your provider will determine whether or not to grant you forbearance. Let’s break down the different types of loan forbearance. General Forbearance General forbearance, also called discretionary forbearance, is the most common type of student loan forbearance. Under this model, a person who thinks they qualify for forbearance contacts their loan provider, who will either approve or deny their request. A few reasons people might request general forbearance include: Job changeMedical billsFinancial crisis In some situations, other financial crises will make someone eligible for loan forbearance. If you think you might be eligible, contact your loan provider. Mandatory Forbearance In some cases, the loan provider is required to grant the lendee forbearance. If you can provide the necessary documentation to prove you qualify, your provider will be legally obligated to grant your request. A few reasons people might request general forbearance include: High payment to income ratioQualifying job or residencyMilitary status While you will still have to contact your loan provider and apply for forbearance, your lender is required to give you some form of relief. Private Forbearance Forbearance is generally only an option under federal student loans. However, those who have privately-funded loans may still be able to apply for it. If you have private loans, contact your provider to learn about their policy on forbearance. Pros and Cons of Student Loan Forbearance Pros of Student Loan Forbearance Cons of Student Loan Forbearance Prevents you from defaulting on your loans Usually only lasts 12 months Doesn’t impact your credit score Accrues interest over time Gives you time to become financially stable May require an upfront payment Loan forbearance is typically only sought after and granted to people who experience financial hardships. Because of this, the biggest pro of forbearance is that it can give you time to get back on your feet and start paying down your loan. However, forbearance may have some cons compared to other loan easement options, as it will continue to accrue interest. Alternatives to Forbearance Those who aren’t interested in forbearance have other options. Your loan provider can help you navigate which will be right for your needs and lifestyle. Some potential options are: Switching your payment date to a more convenient dayGetting a debt consolidation loan to combine all your payments into oneApplying for loan forgivenessRefinancing your loans Your loan provider can help you navigate your options and determine which will be the best for your financial needs. Deferment vs. Forbearance Another popular option is loan deferment. While both forbearance and deferment will allow you to delay your loan payments, there is one key difference: interest. If your provider grants you loan forbearance, your loans will still accrue interest over time, which means you’ll end up paying more. If you are granted loan deferment, your loans will not accrue interest. The Bottom Line Those who find themselves in hot water may be able to cool down with student loan forbearance. This 12-month grace period can allow you to set up a budget and get back on your feet before starting up payments again. Whether or not student loan forbearance is an option — or the terms of your forbearance — is up to your loan provider. That’s just another reason why finding the right student loan for you is of the utmost importance. Student Loan Calculator FAQs about Student Loan Forbearance Have some more questions about loan forbearance? We have answers. Is Student Loan Forbearance Bad? While student loan forbearance may not be ideal, it isn’t bad. It’s certainly better than the alternative—defaulting on your loan. The main drawback of student loan forbearance is that your loans will continue to accrue interest and can be expensive in the long run. Does Forbearance Affect Student Loan Forgiveness? If your loans are in forbearance, it will prevent you from getting your loans forgiven. In order to apply for (and be granted) student loan forgiveness, you need to be actively making payments on your loans Who Qualifies for Student Loan Forbearance? People may qualify for student loan forbearance for a variety of reasons. For example, someone who has just changed jobs and needs time to adjust may be able to apply for forbearance. Veterans, teachers, those in a medical residency program, or someone with high medical bills may also qualify. If you think you’re experiencing qualifying financial hardship, contact your loan provider. Next Post Should I Go Back To School: Is It Worth It? Written by Mint Mint is passionate about helping you to achieve financial goals through education and with powerful tools, personalized insights, and much more. More from Mint Browse Related Articles Mint App News Intuit Credit Karma welcomes all Minters! Retirement 101 5 Things the SECURE 2.0 Act changes about retirement Home Buying 101 What Are Homeowners Association (HOA) Fees and What Do … Financial Planning What Are Tax Deductions and Credits? 20 Ways To Save on… Financial Planning What Is Income Tax and How Is It Calculated? Investing 101 The 15 Best Investments for 2023 Investing 101 How To Buy Stocks: A Beginner’s Guide Investing 101 What Is Real Estate Wholesaling? Life What Is A Brushing Scam? Financial Planning WTFinance: Annuities vs Life Insurance