If you do not qualify for a deferment as we discussed in our last blog, you may qualify for a forbearance. Optional forbearances for direct, FFEL loans and Perkins loans can be granted in the discretion of the servicer for:
- financial difficulties
- medical expenses
- change in employment
- other reason acceptable to your servicer
These discretionary forbearances can last for up to twelve months but can be renewed annually for up to three years if the condition persists.
Your servicer must grant a forbearance if you:
- are serving in an AmeriCorps position
- qualify for partial repayment of your student loans under the Dept. of Defense Student Loan Repayment Program
- are serving in a medical or dental internship and meet the qualifications
- are a member of the National Guard and have been activated by a governor
- your student loan debt each month is twenty percent or more of your gross income (limited to three years)
- are teaching at a position that would qualify you for a teacher loan forgiveness
Mandatory forbearances last for up to twelve months and can be renewed annually if the condition persists.
You must continue to make your payments pending receipt of notification whether you are approved for the forbearance to prevent going into default and, therefore, not qualifying for the forbearance.
We review these options to avoid the unnecessary commitment to an income-driven repayment plan if you qualify for a shorter-term solution. You have the burden, in most cases, to demonstrate to your servicer that you qualify for a forbearance. In the next two blogs, we will discuss traditional and income-driven payment plans. If you need assistance in presenting your case, contact us. We give second chances here on Second Street.