Student Loan Forbearance: 8 Pros and Cons

According to the latest student loan statistics, there are 45 million student loan borrowers in the U.S. who owe $1.7 trillion to the U.S. government.

This number just continues to grow. Student loan debt is now the largest source of debt in America, and the average American has $30,000 in student loan debt, or $50,000 if they are a parent. 

One option for struggling borrowers is student loan forbearance. This allows you to temporarily stop making payments or reduce your monthly payment.

The forbearance period can last up to 12 months. The main disadvantage of forbearance is that interest will continue to accumulate on your loans, which can increase the total amount you owe.

In addition, most forbearance options are only available if you are experiencing financial hardship, such as unemployment.

As a result, borrowers who are able to make regular payments should consider other options, such as personal loan consolidation or repayment plans. Try a personal loan calculator to compare different loan options and find the best fit for your budget.

However, it’s still an option that’s worth considering in the right circumstances. Here are a few things you need to know so that you can decide whether forbearance is the best option or if there’s another way to reduce your debt burden. 

What is student loan forbearance?

Student loan forbearance is a request made by the person responsible for making monthly payments on either private or federally-owned student loans. If forbearance is approved, the payments on your student loans are deferred for a period of 12 months.

Forbearance is typically requested during times of financial hardship, either due to job loss or for people dealing with medical debt consolidation to pay off considerable medical debts.

The federal government will typically approve forbearance for most loans once or twice but will rarely offer a renewal.

Private loans are especially hard to get granted forbearance since they’re not beholden to the federal government’s guarantor procedures. 

The pros and cons of requesting student loan forbearance

Forbearance on student loans is a great feature to have available for those who need it, but there are some drawbacks you need to know before requesting it.

Forbearance Pros

  • It doesn’t require a default on your loan or wage garnishment.

  • Your interest rate will still be lower than other loans, so less debt will accrue.

  • It is available for times when you need it most.

  • It doesn’t impact your credit score.

Cons of Forbearance

  • Only good for 12 months.

  • Interest continues to accrue even when your payments are temporarily waived.

  • Repeatedly requesting forbearance could result in your loans defaulting and you end up in collections.

  • If you can’t get back on track and make your payments on time once forbearance is over, your credit score will decrease. 

The bottom line

You should consider forbearance if you are having trouble making your payments to have a good chance of getting them back in order.

If you qualify for forbearance and have any payments deferred, it will not cause your student loans to be forgiven.

However, you will be able to renew the forbearance for another 12 months if you qualify, but the drawbacks are significant if you want to borrow money later.

Use this guide to weigh whether forbearance is the right option for you so that you can make the best financial decision possible. 

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