Many lenders for student loans allow the borrowers to apply for forbearance. This is a special loan status that allows the borrower to make reduced payments or stop making monthly payments for a while. Putting a loan in forbearance can alleviate stress on your budget, without damaging your credit score with missed payments.
If you are applying for student loan forbearance, the total length of time allowed for this debt relief is 36 months.
Total Forbearance Limits
Federal student loans allow borrowers to have no more than three years, or 36 months, of forbearance. Federal student loans include Stafford, Perkins and PLUS loans. Private lenders set their own caps that might differ from the federal government limits. Contact your lender to find out the overall cap on how long you can receive forbearance.
Limit Per Request
Federal student loans allow borrowers to receive no more than 12 months of forbearance with each application. If the borrower requires another forbearance period, he must reapply to be granted another period of up to 12 months. If you only need forbearance for a few months, ask if you can forbear for a shorter period to save you from using up so much of your limited forbearance. Because once you have used up your 36 months of forbearance, you will not be granted more time should you need it in the future.
How to Forbear
Apply for forbearance through your lender. There might be an application on your online loan management page, or you might have to call the lender to receive an application. When you apply, fill out all required information, including the reason for which you are requesting forbearance. Submitting an application does not guarantee that you will receive forbearance. To avoid damaging your credit score and incurring late fees, continue making your payments as regularly scheduled until your lender has notified you that your loan is in forbearance.
Other Important Considerations
When you forbear on a student loan, interest still accrues on your balance at its regular rate, even if your loan was subsidized. Therefore, if you pay less than your interest payment each month, you will owe more when the forbearance ends than you did when it began. This will increase the overall cost of repaying your loan. If you have a subsidized federal loan, apply for deferment before applying for forbearance because the government pays interest on deferred subsidized loans. Deferment is usually granted for borrowers who are in school or who are suffering extreme financial hardship due to unemployment or other reasons.