Forbearance allows some federal student loan borrowers to temporarily cease making monthly payments. This can be quite a relief for those experiencing hardship, but it doesn't last forever. You may be able to extend it up to three years, but while your loans are in forbearance they do not accrue time toward loan forgiveness or the maximum repayment time limit.
Qualifying for Forbearance
Requesting forbearance doesn't cost you anything. However, you must meet eligibility requirements. A forbearance can be an option during times of financial hardship, such as unemployment or illness. Certain types of community service, internships or military service qualify.
In some cases, you are automatically granted forbearance. This is true for people serving in a medical or dental internship or residency program and for most active AmeriCorps members. Also, people who get teacher loan forgiveness and certain members of the military also qualify for forbearance. Regardless your occupation, you can qualify if your combined federal student loan payment is 20 percent or more of your gross income. Under these circumstances, the forbearance is usually for a maximum of 12 months, but can be renewed. The three-year option is there if you qualify due to financial hardship.
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In most cases, the lender has discretion and can decide whether or not to grant forbearance due to financial reasons or illness. Expect to be asked for documentation to support your claim such as pay stubs, your most recent tax return or medical documentation. The lender will want to verify that you want to make your payment, but that you simply can't due to temporary hardship. The terms are the same as those for a mandatory forbearance.
Apply in Time
There is another crucial time element when it comes to a forbearance request. You must get one within 270 days of your last missed payment date or you lose forbearance eligibility. If you have trouble making payments, contact your lender or the loan servicer well before the eligibility date to see if you qualify. This can save your credit from dings due to late payments. Lenders can process verbal forbearance requests. If you must provide documentation, you may qualify for an administrative forbearance to allow processing time.