Student Loan Forbearance

Forbearance is similar to deferment, but in forbearance a loan holder is still required to pay the interest which accrues on their outstanding balance. Also, forbearance is granted by the lender; no loan holder has the right to forbearance, as in deferment. The process begins when a lender gives permission to a loan holder to postpone payment of the loan principal. There are, however, only specified reasons a lender will allow forbearance. Financial hardship, teaching in a teacher-shortage area, or an unusual life circumstance are the main reasons for forbearance.

Lenders are very particular about giving permission to forbear a loan. A person must have a good history of repayment and cannot be in loan default to be eligible. Some of the most common conditions in which forbearance is granted are if a loan holder is unable to work due to poor health or personal problems, is serving a medical or dental internship or residency, or is serving in a governmental volunteer service position. Each candidate for forbearance is considered on a case-by-case basis. Loan holders should check with their respective lenders for details on how to apply for forbearance.