If you’re having trouble making your student loan payments, there are many ways to find relief. The Department of Education provides a variety of repayment plans to keep you on track without causing you hardship. Sometimes that’s not enough, and you need to stop payments altogether for a period of time. That’s called forbearance.

There are two types of forbearance: mandatory and discretionary, and it can last up to 12 months. You will find that your FFELP or Direct Loan lenders are not like your auto loan lenders or credit card companies, in that they often want you to succeed and will try to help you through difficult times.

Lenders are required to provide a mandatory forbearance if you meet certain qualifications, which include:

• Your monthly loan payment is 20% or more of your gross monthly income
• You are serving in a medical or dental residency and meet specific requirements
• You are teaching in a program that qualifies for teacher loan forgiveness
• You are serving in an organization such as AmeriCorps
• You are called into active military duty
• You qualify for partial repayment under the U.S. Dept. Of Defense Student Loan Repayment Program.

A discretionary forbearance is one that is granted to you by your lender, even when they aren’t required to do so by regulations. It’s smarter for lenders to grant you a discretionary forbearance and reevaluate your situation in 6 or 12 months than to let you go into default and send you to collections.  Most lenders will approve forbearance for illness, unexpected expenses, or financial hardship, even if your loan payment is less than 20% of your gross monthly income.

Your loan interest, on both Subsidized and Unsubsidized loans, continues to accrue while you’re in forbearance, but (unlike going into default) forbearance status will not affect your credit score. The interest will be added to your principal balance and then you’ll be charged interest upon interest as time passes. If you can afford to, make interest-only payments on your loan during forbearance.

Start the process by contacting your loan servicer. If you’re an SSMT grad and don’t know who to contact, just ask us and we’ll be happy to look it up for you.