Federal Student Loan Forbearance

Forbearance is a way to temporarily postpone or reduce payments for a set period of time. This typically takes place because the borrower is experiencing financial difficulty, but can occur for any of the following reasons:

• Unemployment
• Partial Disability
• Other documented hardship

The borrower can receive federal student loan forbearance if he/she is ineligible for a deferment. Unlike deferment, it doesn't matter if these loans are subsidized or unsubsidized because interest still accrues, and the borrower is responsible for its repayment. The borrower's loan holder can grant forbearance in intervals of up to 12 months at a time and for up to 3 years. In order to enact federal student loan forbearance, it must be applied for through the loan servicer, and payments must still be made until forbearance has been granted.

Interest Rates and Federal Student Loan Forbearance

In addition, federal student loan forbearance does NOT lock interest rates. Even though loans are deferred, they still have variable rates unless a loan is being deferred that was also consolidated (which has a fixed interest rate). Currently, interest rates are at 39 year lows - therefore the best way to defer loans presently is to consolidate now, so that the borrower will be able to defer after the consolidation is complete and lock in these low rates for the life of the loan.

Apply for Stafford Loan Consolidation