Student loan forbearance is a form of financial relief for borrowers struggling to pay off their student loans. It allows borrowers to temporarily suspend or reduce their payments, giving them the opportunity to get back on their feet financially.
Reasons for forbearance include:
- Decrease in income
- Unemployment
- Incurring medical expenses
To be eligible for forbearance, borrowers must meet certain criteria, such as having a qualifying loan type and being able to demonstrate financial hardship.
During forbearance, interest will continue to accrue on the loan and may be added to the principal balance.
What Is the Difference Between Forbearance and Deferment?
Forbearance and deferment are two options available to students who are having difficulty paying back their student loans. While they both provide relief from loan payments, they are different in terms of the amount of time they provide and the requirements for eligibility.
Forbearance is usually granted for up to 12 months at a time and can be renewed for up to three years. During forbearance, interest continues to accrue on the loan, but the borrower is not required to make payments.
To be eligible for forbearance, borrowers must demonstrate financial hardship or illness.
Deferment, on the other hand, is usually granted for up to three years at a time and can be renewed for up to five years. During deferment, interest does not accrue on subsidized loans, but it does accrue on unsubsidized loans.
To be eligible for deferment, borrowers must meet certain criteria such as being enrolled in school at least half-time, being unemployed, or having an economic hardship.
Deferment is mostly used for Federal student loans – which most international students don’t qualify for.
Private international student loans also offer deferment, which allows them to postpone payments for up to 9 months after graduation. Some lenders also offer deferred payment option – which postpones loan payments until after the student graduates.
This table highlights the differences between forbearance and deferment:
| Forbearance | Deferment |
| · Granted for up to 12 months at a time | · Granted for up to 3 years at a time (for federal student loans) |
| · Can be renewed for up to 3 years | · Can be renewed for up to five years (for federal student loans) |
| · Loan continues to accrue interest | · Unsubsidized loans continue to accrue interest while subsidized ones don’t |
| · Financial hardship or illness for eligibility | · A wider criteria of eligibility including being enrolled in school and military deployment |
Pros and Cons of Student Loan Forbearance
While student loan forbearance comes in handy when you’re facing financial hardship, it comes with some drawbacks. To help you make an informed decision before requesting forbearance, it’s important to consider the pros and cons.
Firstly, forbearance allows borrowers to temporarily stop making payments on their loans, which can provide some much-needed financial relief. This can be especially helpful for those who have lost their job or had their income reduced due to the current economic situation. Additionally, borrowers can often qualify for interest rate reductions or other benefits when they enter into a forbearance agreement.
Another benefit of student loan forbearance is that it can help borrowers avoid defaulting on their loans. Defaulting on a loan can have serious consequences, including damage to a borrower’s credit score and the potential for wage garnishment. By entering into a forbearance agreement, borrowers can avoid these negative consequences and keep their loans in good standing.
One of the biggest drawbacks, on the other hand, is that interest will continue to accrue during the forbearance period. This means that the total amount owed on the loan will increase, which could make it more difficult to pay off the loan in the future.
Borrowers should also be aware that entering into a forbearance agreement will extend the repayment period of the loan. That means that borrowers will have to make payments for a longer period of time, which could lead to higher overall costs.
Here’s a quick summary of the pros and cons of student loan forbearance:
| Pros | Cons |
| · Provides relief in case of financial hardship | · Lasts for only up to 12 months |
| · Doesn’t negatively affect your credit score | · Loan continues to accrue interest |
| · Gives you time to consider options such as loan consolidation or refinancing | · You could end up paying more on your student loan |
| · Prevents the possibility of defaulting on your student loan | · May not be an option for some private student loans |
International Student Loan Forbearance: Compare Different Lenders
Various lenders that offer international student loans offer forbearance to students experiencing financial hardship.
The table below gives you quick look at the major student loan forbearance period:
| Lender | Forbearance Period |
| 8B Loan Program | Available on request |
| MPOWER Student Loan | Available on request |
| Ascent Funding | 1 to 3 months at a time, you can apply for up to 4 consecutive periods of forbearance, with a maximum of 24 months |
| Prodigy Finance | Offers forbearance in 3-month increments |
| Sallie Mae | Available on request |
| SoFi | Offers forbearance in 3-month increments, up to a total of 12 months |
How to Apply for International Student Loan Forbearance
Once borrowers have that you’re likely to be eligible for international student loan forbearance from your provider, you can start the application process.
The first step is to contact the lender or servicer and explain why you need forbearance. Be prepared to provide documentation that proves your eligibility such as:
- Proof of income
- Proof of employment
- Other documents that demonstrate your financial situation
Once the lender or servicer has reviewed the application and all necessary documentation, they will determine whether or not the borrower is eligible for forbearance.
If your application is approved, the lender or servicer will provide you with a forbearance agreement outlining the terms of the forbearance period. Before adding your signature, make sure to read and understand the agreement.
Bear in mind that you’ll have to continue making payments until your international student loan forbearance application is approved. If you don’t make these payments, you could end up with late payments – which can affect your credit rating.
Are There Alternatives to Forbearance?
What if you don’t qualify for international student loan forbearance?
If you are struggling to make your student loan payments but don’t qualify for forbearance, you could explore options such as:
- Loan consolidation: allows you to combine multiple loans into one loan with a single monthly payment
- Discuss changing your repayment plan: your lender might be willing to change your repayment plan to one that’s more manageable for you.
- Student loan refinancing: could help you save money by reducing your interest rate and monthly payment
The Bottom Line
Student loan forbearance can be a great way to reduce the burden of student loan debt. However, bear in mind that the forbearance period is temporary and that interest may still accrue during this time.
Before requesting forbearance from your lender, research all options and understand the terms before. Ultimately, it is up to you to decide if student loan forbearance is the right option for you.
Remember, the best way to manage student loan debt is to create a budget and repayment plan that works for you and your financial situation. With a little bit of planning and research, you can manage and pay off your student debt.
FAQs on International Student Loan Forbearance
Are international students eligible for education loan forbearance?
Yes. Most private loan providers lending to international students offer forbearance to borrowers experiencing financial hardship.
Does student loan forbearance hurt your credit?
No. Student loan forbearance doesn’t hurt your credit. Remember to make sure to make all payment until your forbearance application is approved. Once the forbearance period is over, resume your payments.
How long does international student loan forbearance last?
Typically, international student loan forbearance is applied in 3-month increments. It can last for up to 12 months.
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