Here is some “straight talk” about Federal Student Loan forbearance.
It is important to understand that your student loan cannot be in default for you to request forbearance. Now that you have qualified yourself as a candidate, you may apply to postpone your education loan repayment by the use of forbearance.
What this means is that you can request a temporary postponement or even a reduction in your student loan payments for a period of time that you are having financial troubles. The interest will still accrue and you will be required to pay it. You can apply to have your monthly payment reduced. You can ask to make interest only payments or even request to suspend your payments altogether.
Here are some important points to know about forbearance:
1. You must be willing but unable to make your monthly payment due to a financial hardship.
2. You must continue to make your regular monthly loan payments until your request is approved.
3. Your request, if approved, is only for a period not to exceed 12 months at a time for up to 3 years. If your financial situation does not change, or is worse, you will need to file another forbearance request. If you are “between” forbearance periods be sure to make your regular monthly payments on time.
4. The forbearance time period does not count towards the time you have to pay off your educational loan.
5. Forbearance is not automatic. You or someone acting on your behalf (your spouse or parents) must apply for it.
6. The Department Of Education can grant you a 60 day forbearance period while it collects and processes your application. Interest which would usually accumulate during this 60 day period will not be “capitalized” into your student loan.
7. You are required to notify the Direct Loan Servicing Center when the condition that qualified you for the forbearance ends.
8. You may be eligible for a teacher, medical or dental student or military student loan forbearance. Check with your lending agency for more information.
Remember that forbearance is when your loan servicing agency or your lender agrees to temporarily reduce or postpone your loan payments.
Avoiding student loan default is the major factor in taking into consideration a request for student loan forbearance. While you may not qualify to have your loan deferred, where interest is not capitalized into your loan, you may qualify to have your loan declared in forbearance where interest still accumulates and for which you are responsible.