Student loan debtors who don't qualify for a deferment may be able to obtain a forbearance from a student loan servicer. A forbearance allows a student loan debtor to make reduced or even no monthly payments for up to 12 months, with interest continuing to accrue on all loans, whether subsidized or unsubsidized. A request for a forbearance must be made to a student loan servicer, since, like a deferment, obtaining a loan forbearance is not automatic. A student loan debtor must submit documentation to support any forbearance request. A student loan lender makes the final decision whether to grant a forbearance.
A forbearance may be one of two types, discretionary or mandatory. A discretionary forbearance may be requested on the basis of a student loan debtor's illness or financial hardship. With mandatory forbearances, if a student loan debtor meets the eligibility criteria for the forbearance, a lender is required to grant the forbearance.
A student loan debtor may request a mandatory forbearance for the following reasons:
- The student loan debtor is serving in a medical or dental internship or residency program and meets other specific requirements.
- The total amount owed each month for all the student loans received is 20 percent or more of a student loan debtor's total monthly gross income subject to meeting additional conditions.
- The student loan debtor is serving in a national service position for which he or she received a national service award.
- The student loan debtor is performing teaching service that would qualify for teacher loan forgiveness.
- The student loan debtor qualifies for partial repayment of his or her loans under the U.S. Department of Defense Student Loan Repayment Program.
- The student loan debtor is a member of the National Guard, whose unit has been activated by the governor of the state, but the student loan debtor is not eligible for a military deferment.
Interest continues to accrue on all types of student loans, including subsidized loans during a forbearance. Interest may be paid during forbearance or the interest may be allowed to accrue. Interest unpaid on a loan during forbearance may be capitalized or, added to the student loan's principal balance.If you experiencing problems repaying your student loans, Loan Lawyers may answer all of your questions going forward as well as help you obtain a deferment or forbearance. The experienced South Florida defense attorneys at Loan Lawyers are here to review a difficult financial situation to assess all of your available options. To schedule a free consultation at any of our three conveniently located offices, contact Loan Lawyers today by calling (888) FIGHT-13 (344-4813).