Forbearance is a way you can go about postponing your student loan payment, and it is not that much different than a deferment, except in one area:
- Deferments don’t capitalize the interest that accrues during the actual time that you delay the repayment term, a forbearance does.
This means that over the long-run a forbearance will cost you more than most deferments, and should therefore be utilized after all of your deferment time as been exhausted.
A forbearance works almost exactly like deferments do in the way that they can delay when you have to make a payment on your student loan. Student loan lenders will typically make their loans with a predefined amount of forbearance time that you can utilize over the life of your loan.
A forbearance is rarely ever “automatically” put into effect like some deferments are, and you will most likely have to personally request a forbearance from your lender each time you want to utilize this option.
Federal and Private Education Loans
I know that Stafford Loans come with a certain amount of forbearance time built in, although I’m not sure about Perkins Loans, PLUS Loans, and other types of federal student loans.
They most likely do, and to utilize such time you will have to contact the servicer of your loan and make an appropriate request. Most lenders will not require that you provide the same kind of reasoning that is mandatory for most deferments, and the majority of time you will simply have to contact your lender and explain to them that you want to utilize your forbearance time, and for how long.
Because most federal student loans come with an enormous amount of forbearance time, it is fairly simple and straightforward to go ahead and make use of such time. The forbearance time that is available for a private student loan can vary to a much higher degree when compared to a federal student loan, and it is therefore imperative that you learn about the actual forbearance time that is built in to your private loan before you go ahead to accept and sign the actual promissory note.
- Some private student loans don’t come with any forbearance or deferment time, and require that you make payments while you are still in school.
This is why it is so important to understand if any deferment or forbearance time is inherently built in to your loan beforehand, as most student-borrowers and parents want at least some deferment and forbearance time available, especially when they are still in school. Most private student loans will come with forbearance time, how much exactly will depend on the lender, while most private lenders will provide about a year’s worth of forbearance time with each of their loans.
Utilizing a Forbearance
When you are ready to utilize your forbearance time you simply need to contact your lender via whatever means they deem appropriate. Some lenders will allow you to put your loans into forbearance via their website, while some will allow you to do it over the phone, or via a written application.
Some will actually charge you a fee for each time you put your loans into forbearance. This frankly is a ridiculous practice, although you sometimes have no choice when dealing with some of the larger student loan lenders… um…. Sallie Mae.
After you put your loan into forbearance you must take note of the date when you must begin to make payments once again. Students often forget that their loans are in forbearance, only to find out that they have missed a payment or two, and have to eventually find out via a late-payment notice that is sent to them by their lender.
Don’t let this happen to you! Write down when you have to begin making your payments again and you shouldn’t have a problem, although because a forbearance is usually made in lower increments than deferments, for example three months versus six months, it is critical that you pay attention to the date when you must begin repayment.
