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Forbearance On Student Loans – How One Qualifies

November 19, 2011

Forbearance On Student Loans

forbearance on student loans

The act of forbearance on student loans is essentially when you get to postpone or lower your loan payments for either a small amout of time to up to a year or more, if you fit certain requirements, which mostly have to do with the individual encountering financial hardship. During this time, it is likely that one will receive notifications that they must pay interest on their loans only, or let it accrue, or in other words pile up, which if one chooses to allow the interest to accrue, the funds will be capitalized. Student loan forbearance is applicable on both federal as well as private student loans, if you meet certain criteria which is discused directly below.

Requirements For Forbearance On Student Loans

Depending on your lender and other encompassing factors, requirements needed to qualify for forbearance vary, but below are some of main aspects in individual must meet in order to qualify for student loan forbearance.

  • Loan Forgiveness Programs – If you are participating in a program that has you working a job in a low income area, like the Teacher Loan Forgiveness Program. This is applicable to student loan forbearance, as often times these jobs will come with lower salaries.
  • In school – If you are enrolled in school or residency in a schedule that is half time or more, you qualify forbearance on student loans.
  • Financial Burden – If the individual applying for student loan forbearance have student loan payments that are equivalent or higher than 20 percent of their monthly income, they can qualify.
  • Community Service – If you are serving in community service programs, like VISTA, Peace Corps or Americorps, the opportunity for loan forbearance on student loans is possible.
  • Unemployment – If you lose your job and are actively searching for another one.
  • Partially Disabled – If one becomes disabled for a certain amount of time, but is not permanent, and results in them not being abe to work for an extended period of time.
  • Serving – If you are serving in a national service position.
  • If a parent has taken out a loan, and their child is experience financial problems resulting in difficulty in paying off loan debt, parents can inquire through their lender about using forbearance for their situation.

The first thing to do if you are considering forbearance on student loans due to the fact that you are having trouble making your payments, is to contact your loan lender and discuss your situation, as often times they will help you so your debt payments can better suit your situation. Forbearance of student loans should be a last resort, and should be considered after using other alternatives like student loan deferment which can be used for situations like unemployment, financial problems as well when one reenrolls in school, or using the Income Based Repayment (IBR) plan, which is a repayment method offered to those paying off federal loans, and allows one to pay 15 percent of their monthly income, where payments can be as low as 5 dollars per month.

If you have exausted all of the other options, forbearance on student loans can be used as a way to avoid things like defualt and delinquency, which all will have negative effects on your credit score among other things.

Forbearance Of Student Loans

September 4, 2011

Forbearance Of Student Loans

forbearance of student loans

Forbearance of student loans of essentially when a lender refrainins from enforcing the montly payments on your student loans. Forbearance of student loans can be an excellent option for if you are in a tough position financially as it is usually offered for up to 12 months, although there are other things that forbearance applies to. Forbearance of student loans not only can get you out of paying loan payments each month, it can also take away any delinquincy if you have it on your loan account.

If you qualify for forbearance, you do not have to pay a fee, but your interest will continue to build up on your loan, which you can pay each month, or pay later.  There are 6 different types of forbearance that can be used, discussed right below.

Forbearance Of Student Loans Requests

You can request 3 different types of forbearance for student loans, which are:

  1. A specific time in which you make no payments at all, which is usually a up to 12 months but sometimes it can be extended by 3 years.
  2. Extending your repayment period is another method of forbearance. This method will help save you money by allow you to pay your loans off from what is usually a 10 year period to anywhere between 12 to 30 years.
  3. The last student loan forbearance method is that you can request to make smaller payments for an certain time frame.

The Different Forbearance Of Student Loans Methods

You are able to receive forbearance for student loans if you fit certain requirements. The requirements are:

  1. If you are willing to pay your student loans but due to personal problems you are unable to do so. This method is for people who are making an effort and not skipping out.
  2. Serving in spefic internships as well as residencies like in the medical or dental feild.
  3. If you are in the military, you are also qualify for forbearance for student loans, as well as the possibility to receive forbearance if you have been in the military already as well as planning to enroll in the near future.
  4. If you are volunteering your time with a community service program. This program must be enlisted under the National Community Service Trust Act.
  5. If you are teaching as well as participating in a forgiveness program designated for teachers.
  6. You an also receive forbearance for student loans in the event that you are paying loan payments that equal 20 percent or more of your income.

Forbearance Of Student Loans Conclusion

This is a parital list of different forbearance for student loans options, which are more of the widely used methods. If the above doesn’t apply to what you though might grant you forbearance, the best thing to do would be to contact your lender as they can provide more information related to your specific information.

Student loan forbearance also should be requested in the event that you are not eligible for student loan deferment, as deferment should be your first choice. Deferment is similiar to forbearance for student loans arance in which you are able to postpone your payments for a certain amount of time for various reasons.