Student Loan Forbearance: How It Works and When to Use It
If you’re struggling to keep up with your student loan payments, student loan forbearance can temporarily pause or reduce them to keep your loans out of default. But it comes with a cost.
When you opt into forbearance, interest continues to build, so it’s best as a short-term solution, not a long-term fix.
In this guide, we’ll review how student loan forbearance works, the types of forbearance, its costs, how it compares to deferment and better alternatives. It’s important to note, too, that federal forbearance rules are changing.
What Is Student Loan Forbearance?
Forbearance allows you to temporarily pause or reduce your monthly federal student loan payments during a period of financial hardship while keeping your loans in good standing.
With forbearance, you avoid defaulting and its consequences. However, interest continues to accrue on your loans during the forbearance period, so your balance grows while payments are paused.
How Student Loan Forbearance Works
Here’s how student loan forbearance works:
- Request forbearance from your loan servicer. You may need to provide documentation for this.
- If approved, your payments pause or drop for a set period of time, typically to 12 months. Forbearance is renewable up to a limit.
- During the forbearance period, interest continues to accrue and unpaid interest may be added to your principal. You can keep making interest-only or partial payments to limit the growth.
Types of Federal Forbearance: Mandatory vs. General
There are two types of federal student loan forbearance: Mandatory and general. In short, mandatory forbearance is more of a right if you qualify, while general is case-by-case. Here’s a look at how they differ:
General (Discretionary) Forbearance
General forbearance is granted at the servicer’s discretion for short-term difficulties like job loss, medical expenses or other financial hardship.
Mandatory Forbearance
Mandatory forbearance is granted when the servicer is required to grant it if you meet specific criteria — such as serving in AmeriCorps, participating in the Department of Defense Student Loan Repayment Program, completing a medical or dental internship or residency or serving in the National Guard in certain situations.
If you’re struggling to keep up with your student loan payments, student loan forbearance can temporarily pause or reduce them to keep your loans out of default. But it comes with a cost.
When you opt into forbearance, interest continues to build, so it’s best as a short-term solution, not a long-term fix.
In this guide, we’ll review how student loan forbearance works, the types of forbearance, its costs, how it compares to deferment and better alternatives. It’s important to note, too, that federal forbearance rules are changing.
What Is Student Loan Forbearance?
Forbearance allows you to temporarily pause or reduce your monthly federal student loan payments during a period of financial hardship while keeping your loans in good standing.
With forbearance, you avoid defaulting and its consequences. However, interest continues to accrue on your loans during the forbearance period, so your balance grows while payments are paused.
How Student Loan Forbearance Works
Here’s how student loan forbearance works:
- Request forbearance from your loan servicer. You may need to provide documentation for this.
- If approved, your payments pause or drop for a set period of time, typically to 12 months. Forbearance is renewable up to a limit.
- During the forbearance period, interest continues to accrue and unpaid interest may be added to your principal. You can keep making interest-only or partial payments to limit the growth.
Types of Federal Forbearance: Mandatory vs. General
There are two types of federal student loan forbearance: Mandatory and general. In short, mandatory forbearance is more of a right if you qualify, while general is case-by-case. Here’s a look at how they differ:
General (Discretionary) Forbearance
General forbearance is granted at the servicer’s discretion for short-term difficulties like job loss, medical expenses or other financial hardship.
Mandatory Forbearance
Mandatory forbearance is granted when the servicer is required to grant it if you meet specific criteria — such as serving in AmeriCorps, participating in the Department of Defense Student Loan Repayment Program, completing a medical or dental internship or residency or serving in the National Guard in certain situations.
Forbearance vs. Deferment
Though both pause student loan payments, forbearance and deferment are two different things. Here’s a look at how they differ:
Forbearance vs. Deferment
| Type | Interest | Eligibility | When to Choose |
|---|---|---|---|
Forbearance |
Accrues on all loan types |
Broader but discretionary |
You don’t qualify for deferment |
Deferment |
Does not accrue on federal subsidized loans |
Requires specific documented situations |
You qualify for it |
What Forbearance Really Costs You
Forbearance can provide some temporary relief from your student loan payments and will help you avoid default, but in the long-term, it will cost you more — literally.
At the end of your forbearance period, you’ll still owe what you did previously, plus the interest that accrued during that time. However, making interest-only payments during forbearance can limit the damage.
Better Alternatives to Forbearance
Forbearance is a decent short-term solution if you’re struggling to make your student loan payments, but if you’re experiencing an ongoing struggle, there are better options, including income-driven repayment.
Income-driven repayment can lower your monthly payment based on income and, unlike forbearance and deferment, those payments still count toward loan forgiveness programs, including Public Service Loan Forgiveness.
Other options include deferment and contacting your servicer about options.
How to Apply for Student Loan Forbearance
Forbearance is handled through your loan servicer for free, so there’s no need to get a third party involved. Here’s how to apply for student loan forbearance:
- Identify your loan servicer. ( You can find this information in your Federal Student Aid account at studentaid.gov.)
- Contact them to request forbearance and ask which type you qualify for.
- Complete the required forms and provide any documentation.
- Keep making payments until the forbearance is approved so you don’t fall behind.
Changes to Forbearance and Deferment to Know
Federal student loan repayments are changing. The One Big Beautiful Bill Act significantly restricts forbearance and deferment for loans after January 1, 2027. The new law eliminates economic hardship and unemployment deferment and limits forbearance to nine months in any 24-month period.
To learn more and keep up with student loan changes, refer to the federal student aid website.
Frequently Asked Questions
Forbearance lets you temporarily pause or reduce your federal student loan payments during a period of financial hardship, keeping your loans in good standing so you avoid default. The important catch is that interest keeps accruing on all your loans while payments are paused — so your balance grows during forbearance. That makes it a useful short-term bridge if you’re facing a temporary setback, but not a good long-term solution.
Both temporarily pause your federal student loan payments, but they handle interest differently. During forbearance, interest accrues on all your loans. During deferment, interest may not accrue on certain subsidized federal loans (though it still accrues on unsubsidized and PLUS loans). Eligibility also differs: deferment requires specific documented situations like being in school, in the military, unemployed, or facing economic hardship, while general forbearance is broader but granted at your servicer’s discretion. If you qualify for deferment — especially with subsidized loans — it’s usually the cheaper choice. See our deferment guide for the full breakdown.
Yes. Interest accrues on all of your student loans during forbearance, including subsidized federal loans that might not accrue interest during deferment. If you don’t pay that interest as it builds, it can be added to your principal balance (capitalized) when the forbearance ends, meaning you’ll then pay interest on a larger amount. Making interest-only or partial payments during forbearance, if you can, helps limit how much your balance grows.
It depends on your situation. Forbearance is a reasonable way to avoid default during a genuinely short-term hardship — a brief job gap or a one-time emergency. But because interest keeps building the whole time, it’s an expensive way to handle an ongoing problem. If your struggle is longer-term, an income-driven repayment plan is usually better: it can lower your monthly payment based on income, and unlike forbearance, those payments still count toward loan forgiveness. Weigh the alternatives before choosing forbearance.
You apply through your loan servicer. Find your servicer in your Federal Student Aid account at studentaid.gov, then contact them to request forbearance and ask which type you qualify for (some, like mandatory forbearance, require documentation). Complete the required form, submit any supporting documents, and keep making payments until the forbearance is officially approved so you don’t accidentally fall behind. It’s handled directly through your servicer for free.
Katie Sartoris is a Certified Educator in Personal Finance and an award-winning journalist with more than a decade of reporting and editing experience in the industry. She joined the Penny Hoarder from Gannett, where she was a local news editor in Central Florida. Katie lives in Leesburg with her husband and cats, and is working on restoring and updating her original mid-century home.
