Forbearance Options

If you are willing but unable to make your loan payments and you do not qualify for a deferment, you can request forbearance. Forbearance is a temporary release from making loan payments, an extension of time for making payments, or a temporary reduction in payment amounts.

Forbearance is less favorable than a deferment for your subsidized loan because you are responsible for paying any interest that accrues on your loan during the forbearance period. You may pay the accruing interest, or add it to the loan principal (this is called "capitalizing") and pay it later when the forbearance ends. Remember, however, that capitalization means you will be paying interest on interest so the total cost of your loan repayment will be higher.

According to Student Loan Forbearance on StudentAid.gov, federal loan servicers must grant you forbearance if you qualify for any of the following mandatory situations:

• You're in a medical or dental internship or residency program and meet specific eligibility requirements
• Your monthly student loan payments total 20% or more of your gross monthly income (additional documentation is required)
• You're serving in an AmeriCorps position and received a national service award
• You're doing teaching service that qualifies for Teacher Loan Forgiveness
• You're eligible for partial repayment under the U.S. Department of Defense Student Loan Repayment Program
• You're a National Guard member activated by a governor, but don't qualify for military deferment

Lenders may also grant forbearance in other situations, like illness or financial hardship, but those are discretionary, not guaranteed. Always contact your servicer for guidance based on your specific situation.