Loan Deferment and Forbearance: Who Qualifies and What You Get
Learn how to temporarily pause your student loan payments if you are facing financial hardship or returning to school.
This scheme allows you to temporarily pause your student loan payments if you are facing specific life changes or financial difficulties.
Who it's for
This option is available to borrowers who are experiencing financial hardship or are returning to school. If your current financial situation makes it difficult to meet your regular monthly obligations, these programs are designed to provide temporary relief.
What you get
You receive a temporary pause on your required loan payments. This period of relief is meant to give you breathing room during difficult times so that you can focus on your education or stabilizing your finances without the immediate pressure of monthly installments.
What it costs you
While you do not have to make payments during this period, interest usually continues to accrue on your loans. This means that even though you are not sending money to your servicer, the total amount you owe can still grow over time due to ongoing interest charges.
The catch to know
It is important to remember that forbearance is not the same as forgiveness. While forgiveness means the debt is wiped away, these options only delay your obligation to pay. A major catch is that interest can capitalize. This means the unpaid interest that built up during your pause gets added to your principal balance, which can increase the total amount you owe and change your future payment amounts.
How to apply
- Determine if your specific situation qualifies for deferment or forbearance based on your financial status or educational enrollment.
- Contact your loan servicer to discuss the different options available for your specific loan type.
- Complete and submit the necessary application or request forms required by your servicer to officially pause your payments.