Student loans are a major issue in the United States. More and more, those leaving higher education find themselves saddled with huge amounts of debt which is difficult – if not impossible to repay on time. When it comes to student loans – or any loans for that matter – some of the terminology may seem alien in nature. Forbearance is one example of this strange language. But what is it, and can student loan forbearance help you?
What Is Student Loan Forbearance?
If you find yourself not being able to repay your student loan on time, there are options available, including forbearance. Put simply, forbearance is a type of financial protection offered by Federal Student Aid for those having difficulties making their scheduled payments on their federal student loans. Private lenders may also provide forbearance to those who are struggling to meet their repayment commitments, but these options vary based upon the lender and the terms of the loan agreement.
Forbearance on federal loans is available for both Direct Subsidized and Unsubsidized Loans. When you successfully have your federal student loans put into forbearance, you are able to postpone any monthly payments for a set period of time – usually up to 12 months. This allows you to escape the nightmarish possibility of your student loans defaulting, which can result in a whole host of unwanted issues, including taking a serious hit to your credit score, as well as the possibility of wage garnishments.
Determining If Forbearance of Student Loans Is right for You
Forbearance is a great way to give yourself some time to improve your financial situation or to make arrangements with your student loan provider to reduce your monthly student loan payments. Unfortunately, while your loans are in forbearance, the interest on your overall loan balance continues to accrue, meaning the total amount due will most likely increase – even though your monthly payments have stopped. Because of the accrual of interest, it is important that you consider every aspect of forbearance before you decide to apply.
For those in particular situations, your loan service provider is required to approve your request for forbearance. These instances include:
- Those serving in AmeriCorps.
- Anyone completing a medical or dental internship or residency.
- A member of the National Guard who does not meet the requirements for a military deferment.
- Teachers who qualify for teacher loan forgiveness.
- Those whose monthly payments have been a minimum of 20-percent of their gross income for three years.
Contact Engage IQ Today to Learn About Your Student Loan Repayment Options
If you’re looking for the best way to pay off student loan debt, Your Consumer Services can help you. We offer private student loan counseling through one-on-one chat. There is no upfront cost for clients. You can connect with a live person from a non-profit willing to provide you with further information on your student loan forbearance options. as well as reduce your debt or monthly payments. You can also email us. Our debt specialists are waiting to hear from you and can answer any questions you may have. So, if you’re ready to get a break from crippling monthly payments – let’s do this!