What Is Student Loan Forbearance? Pros and Cons

Student loan borrowers can temporarily pause or reduce their payments by putting their debt into forbearance. While this can be a helpful option in many circumstances, it comes with some drawbacks — including the potential for your loan balance to increase.

Here’s how student loan forbearance works, how it differs from deferment, and when applying for forbearance might be the right option.

What is student loan forbearance?

Student loan forbearance allows you to temporarily pause or reduce your student loan payments.  

In March 2020, all federal student loans were put into forbearance due to the COVID-19 pandemic. This was a special, temporary allowance during which payments were not due for any borrowers, and interest was also paused.  

In most circumstances, however, you must apply for forbearance and meet other conditions before your payment obligations are suspended. When you apply, your forbearance period generally lasts up to 12 months. After that, you may be allowed to reapply again if your circumstances still qualify, but there’s a lifetime limit of three years of federal forbearance. 

You can put federal student loans into forbearance only if you meet certain requirements, though. In some cases, your loan servicer must allow you to pause payments. Known as mandatory forbearance, it's available in limited circumstances, such as serving in AmeriCorps or during medical or dental residency. In other cases, your servicer has the choice to allow forbearance — called general or discretionary forbearance — but isn't required to.

Most private student lenders also allow you to put loans into forbearance, though exact policies vary by company. Generally, private loan forbearance is shorter than federal loan forbearance, and lifetime limits on how long you can pause payments may apply. You’ll also typically need to show extenuating circumstances, such as a job loss, serious medical issue, or economic hardship, to qualify.

Deferment vs. forbearance 

Forbearance and deferment are two methods that allow you to pause your loan payments. While the terms are often used interchangeably, they vary in several ways.

Deferment allows you to pause payments, but there are different circumstances when you can qualify for it. You may qualify if you’re enrolled at least half-time in school, are in a post-graduation grace period, undergoing cancer treatment, or relying on government benefits due to financial need. 

Notably, you won’t pay interest on some types of loans during deferment. If you have Direct Subsidized Loans or Perkins Loans, you’re not responsible for accrued interest. Your deferment will also last for a set period of time based on the type of deferment you qualify for — and which could be indefinite as long as you remain eligible. 

With forbearance, on the other hand, you must reapply every 12 months, if not sooner. There is also a broader set of circumstances in which you are eligible, and interest will accrue on all loans during your entire forbearance period. 

Related: Student Loan Deferment vs. Forbearance: How to Choose

Types of student loan forbearance

If you have federal student loans, there are two types of forbearance: Mandatory forbearance and general (or discretionary) forbearance. 

Mandatory forbearance applies to federal Direct Loans and loans through the Federal Family Education Loan (FFEL) program. Your lender must allow you to put your loans into forbearance in the following situations:

• You’re serving in the AmeriCorps.
• You qualify to have your loans partly repaid under the U.S. Department of Defense Student Loan Repayment Program.
• You’re completing a medical or dental internship or residency.
• You’re a National Guard member who has been activated, but you don't qualify for a military deferment.
• The total amount of money you owe on all federal student loans exceeds 20% of your gross monthly income.
• You're performing services that allow you to qualify for the Teacher Loan Forgiveness program.  

You can also qualify for general forbearance at the discretion of your loan servicer. You may qualify for general forbearance if you temporarily can't make payments due to:

• A change in your employment 
• High medical expenses
• Financial difficulties
• Some other reason your servicer deems to be acceptable 

General forbearance is an option for Direct Loans, FFEL Loans, and Perkins Loans.  

With private student loan lenders, there generally are not multiple types of forbearance. Instead, your ability to pause payments depends on the lender’s policy. Contact your lender before you miss a payment and explain your situation to learn about your options.

Pros and cons of student loan forbearance

There are both advantages and disadvantages to student loan forbearance. Here are some of the biggest benefits:

• You can get temporary financial relief: If you’re struggling to pay your loans, a payment pause can give you some breathing room.
• You can avoid default: Student loan default has devastating financial consequences. Pausing payments ensures you don't fall behind and can prevent damaged credit or collection activities being initiated. 
• You can focus on other opportunities: When you don't have to worry about loan payments, you can focus on your residency, AmeriCorps service, or other opportunities that may not pay well enough to repay your debt. 

Here are some of the biggest downsides of putting your loans into forbearance:

• Your loan balance can grow: You will continue to be charged interest while in forbearance. This interest can capitalize, or be added onto your loan balance, increasing the amount you owe. This will make monthly payments and total payoff costlier. 
• You can only pause payments for a limited time: Forbearance is not a permanent solution if you can’t afford your student loans. 
• Your ability to qualify is at the discretion of your lender: Unless you qualify for mandatory forbearance for federal loans, you'll have to convince your lender that you should be allowed to pause your payments. 

How to apply for forbearance

You’ll need to submit a form to your student loan servicer to request forbearance. If you have federal student loans, you can find the appropriate form and directions on the Federal Student Aid site. Depending on your reason for pausing payments, you may need to include documentation with your form. This could include tax data, recent pay stubs, or employer information. 

If you want to pause your private student loans, contact your lender to learn about their process.

Forbearance alternatives

Forbearance isn’t the right choice for everyone, and is generally best used as a temporary solution. Other options to consider include:

• Deferment: If you can qualify for a deferment, this may provide more lasting relief and could save you interest fees if you have Direct Subsidized Loans. 
• Change your repayment plan: If you have federal student loans, switching to an income-driven repayment plan can lower your payment — sometimes to as little as $0. When you pay back loans on an income-driven plan, your remaining loan balance will be forgiven after 20 or 25 years of payments. 
• Employer repayment programs: Many employers offer assistance with loan repayment, especially if you work for the government. You might also qualify for Public Service Loan Forgiveness if you work for the government or an eligible not-for-profit organization. 
• Refinance: Refinancing your student loans can reduce your interest rate and change your repayment term, which could make payments more affordable. It can only be done with a private lender, so federal loan borrowers will lose access to federal benefits like income-driven repayment, forgiveness programs, and other protections. 

By exploring all your options, you can decide which approach is the best way to handle your student loans if you're struggling to repay them as planned.