There are many types of student loan forbearance programs. This article will discuss them and explain how you can use them.
General Student Loan Forbearance
Student loan forbearance extension temporarily reduces your monthly student loan payments. However, if you are experiencing financial difficulty, you may qualify for forbearance depending on the type of loan and lender.
Federal loans such as Stafford and PLUS loans are not eligible for forbearance. Private student loans may or may not be eligible. Each lender has its own rules regarding forbearance, so it's best to check with them directly before proceeding with any action. There are two general student loan forbearance categories: mandatory and discretionary.
Temporary Student Loan Forbearance
This is the most common type of forbearance and is available for both federal and private student loans. As its name suggests, temporary forbearance can be applied to get a break from your monthly loan payments for a short period. However, suppose you have an extenuating circumstance preventing you from making your monthly payments, such as a job loss or medical emergency. In that case, this may be the right option for you.
Mandatory Student Loan Forbearance
You can get a deferment for up to three years if you serve in a national service position, such as AmeriCorps or Peace Corps. The government will pay the interest on subsidized loans during this period while it is still accruing. However, interest on unsubsidized loans continues to accrue during this period and must be paid by the borrower.
Administrative Student Loan Forbearance
Administrative student loan forbearance temporarily postpones your monthly student loan payments. However, you must apply for administrative forbearance, and if approved, it will be granted by your lender or servicer.
You can get an extension of your loan repayment period if you are unemployed. If so, this means that instead of making the usual monthly payments until the end of the term when they would be paid off entirely, students will still have to make monthly payments but will extend into their retirement age.
Administrative Forbearance for Unemployment
While searching for work, you may be eligible for a type of student loan forbearance: administrative forbearance for unemployment. This is granted by the Department of Education, which means it's up to someone other than your lender or servicer.
If you apply and are approved for this type of forbearance, your payments will be canceled until you start working again. You can submit an application online at StudentLoans.gov — but remember that most lenders also have their own forms.
Lantern by SoFi experts says, "General forbearances are available for federal Direct Loans, Federal Family Education (FFEL) Program loans, and Perkins Loans."
Forbearance is an excellent option for anyone who needs help managing their student loan payments. It can be used as a temporary solution to financial hardship, or it can be applied on an ongoing basis if your income is too low to make full payments. If this could benefit you or someone you know, it's important to remember that there are many different types with different requirements, so be sure to check them all out before deciding which one suits your needs best!
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