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If you've recently reviewed your student loan and found your balance marked as "in forbearance," you might be wondering what that actually means. While it can be a concerning term at first glance, forbearance doesn't indicate your loans are in trouble-it simply means that payments are temporarily paused. Still, it's important to understand the reasons behind it and what it could mean for your long-term repayment goals.
Student loan forbearance is a short-term measure that allows borrowers to stop or reduce their loan payments for a limited time. This option is typically granted in cases of financial hardship or while loan servicers resolve technical or istrative issues.
However, it's not a free from your debt. Most forbearance periods allow interest to continue building, which can increase the total amount you owe once repayment resumes.
Common reasons your loans may be in forbearance
There are several possible reasons your student loans could be in forbearance. In some cases, your loan servicer might place your in this status while managing transitions, application backlogs, or billing errors. These istrative delays are typically temporary and do not require any action from you unless you're ed directly.
Another growing reason for forbearance is tied to legal challenges or policy disputes involving new repayment plans. For example, if you've applied for the Saving on a Valuable Education (SAVE) plan, your loan may have been placed in forbearance while federal courts review or block the plan's implementation.
In this situation, no payments are required from borrowers, and sometimes even the accumulation of interest is suspended.
Forbearance may also be granted if you're facing financial hardship. Job loss, unexpected medical expenses, or other short-term economic difficulties can make it difficult to meet your regular student loan obligations. In such instances, you can apply for general forbearance through your loan servicer, though approval is not guaranteed.
While forbearance can offer temporary breathing room, it's not without consequences. Interest often continues to accrue and can be added to your loan balance through a process called capitalization.
This means your debt may grow even though you're not making payments. Additionally, months spent in forbearance generally don't count toward loan forgiveness programs such as Public Service Loan Forgiveness (PSLF) or Income-Driven Repayment (IDR) forgiveness. Though forbearance itself doesn't hurt your credit, failing to resume payments after it ends can.