Federal Stafford 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 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. To request federal Stafford loan forbearance, borrowers must apply through the loan servicer, and payments must still be made until forbearance has been granted.

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Interest Rates and Federal Stafford Loan Forbearance

In addition, for loans borrowed prior to July 1, 2006, federal loan forbearance does NOT lock interest rates. Even though payments are postponed or reduced, they can still have variable rates. Stafford loans borrowed after July 1, 2006 have fixed interest rates and therefore remain the same during periods of forbearance.