Forbearance lets you pause or reduce your student loan payments for a set period, but interest usually keeps growing

Forbearance is a temporary break from making your full student loan payment. During forbearance, you can stop paying, pay a reduced amount, or pay interest only — depending on the type of loan and the forbearance program. The catch: on most loans, interest continues to build even if you're not paying it. That unpaid interest gets added to your loan balance later, which means you'll owe more in the end.

Forbearance is different from deferment, another pause option. With deferment, interest may not accrue on certain federal loans (like subsidized loans), but forbearance almost always means interest keeps growing. Both are temporary — forbearance typically lasts three to six months, though it can be extended.

You might use forbearance if you hit a rough patch financially but expect your situation to improve. It's not forgiveness — you still owe the full amount. It's a delay, with a cost.

Key Takeaways

  • Forbearance pauses or reduces your payment temporarily, usually for three to six months, but interest continues to accrue on most loans.
  • Unpaid interest gets added to your loan balance after forbearance ends, increasing the total amount you owe.
  • Federal loans and private loans have different forbearance rules — federal loans often have more options and protections.
  • You must request forbearance; your lender will not automatically grant it, and you may need to show financial hardship.
  • Forbearance does not stop collection activity, wage garnishment, or tax refund offset if you are already in default.

How forbearance works on federal student loans

Federal student loans come with two main forbearance tracks: general forbearance and income-driven plan forbearance. General forbearance is what most borrowers think of — you contact your loan servicer and request a pause. Your servicer can grant up to three months at a time, and you can request extensions up to three years total. You'll need to show financial hardship or other may have access to reason, though the bar is usually not high.

During general forbearance on federal loans, interest accrues on all loan types. When forbearance ends, that unpaid interest is capitalized — added to your principal balance. If you had $30,000 in loans and $500 in interest accrued during forbearance, your new balance becomes $30,500.

If you're on an income-driven repayment plan and your payment drops to zero because your income is too low, that's also forbearance. Interest still accrues, but the government counts those months toward Public Service Loan Forgiveness if you work in a may have access to job.

How forbearance works on private student loans

Private lenders have no standard forbearance rules. Each company sets its own terms. Some offer forbearance similar to federal loans; others don't offer it at all. Some may reduce your payment instead of pausing it entirely. You have to contact your lender directly and ask what options exist.

Private forbearance almost always means interest keeps accruing. The terms are usually shorter than federal forbearance — often 3 to 12 months maximum. If you're struggling with private loans, forbearance may not be your best option; deferment, if available, or income-based repayment plans (if your lender offers them) might help more.

When forbearance makes sense and when it doesn't

Forbearance works best when your hardship is temporary. You lose your job but expect to find work in three months. Your income drops this year but should recover next year. In those cases, a short forbearance pause gives you breathing room without the long-term cost of capitalized interest.

Forbearance is a poor choice if your hardship is ongoing or permanent. If you're chronically underemployed, disabled, or facing years of reduced income, forbearance just delays the problem and adds interest to your balance. Income-driven repayment plans, which cap your payment at a percentage of your income, usually serve you better. On federal loans, you might also explore Public Service Loan Forgiveness or income-based forgiveness programs.

Forbearance also does not stop collection if you're already in default. If your loans are in default and your wages are being garnished or your tax refunds are being seized, forbearance won't halt that. You'd need to rehabilitate your loans or consolidate them first.

The cost of forbearance: capitalized interest

The main price you pay for forbearance is capitalization. When forbearance ends, unpaid interest gets added to your principal. That means you're now paying interest on interest — your future payments include interest on the capitalized amount.

Here's a concrete example: You have $25,000 in federal loans at 5% interest. You enter forbearance for six months. During those six months, roughly $625 in interest accrues. When forbearance ends, that $625 is capitalized, and your new balance is $25,625. Your remaining loan term is now longer, or your monthly payment is higher, or both.

If you can afford to pay interest during forbearance, do it. You'll avoid capitalization and keep your balance from growing. If you truly cannot pay anything, forbearance is still worth using — it's better than defaulting — but understand that you're borrowing against your future to get through now.

How to request forbearance

For federal loans, contact your loan servicer directly. You can find your servicer's name and phone number on your loan documents or at studentaid.gov. Call them, explain your hardship, and ask to enter forbearance. Most servicers will ask you to fill out a form or provide documentation of hardship, though some grant forbearance over the phone.

For private loans, call your lender's customer service line. Ask whether forbearance is available and what documentation they need. Be prepared to explain your situation in detail — private lenders are less standardized and may ask more questions.

Forbearance is not automatic. You have to request it. If you stop paying without requesting forbearance, your loans will go into default, which damages your credit and triggers collection activity. Always contact your servicer or lender first.

Forbearance versus other payment options

Forbearance is one tool among several. Deferment is similar but may not accrue interest on subsidized federal loans — a real advantage if you may have access to. Income-driven repayment plans lower your payment based on what you earn, potentially to zero, and count toward forgiveness after 20 to 25 years. Loan consolidation combines multiple federal loans into one, which can lower your payment and open new repayment options.

If you're facing hardship, start by asking your servicer which options you may have access to for. Forbearance is fast and requires minimal paperwork, but it may not be the cheapest long-term choice. Income-driven plans, for example, cost more in total interest but spread payments over decades and offer forgiveness at the end.

What happens after forbearance ends

When forbearance ends, your regular payment resumes. If interest was capitalized, your new balance is higher, so your payment may be higher too — or your loan term may be longer. Your servicer will send you a notice before forbearance ends, telling you what your new payment will be.

If you're still in hardship when forbearance ends, you can request another forbearance period or switch to a different repayment option. On federal loans, you can enter forbearance multiple times, up to three years total. On private loans, it depends on your lender's policy.

If you miss payments after forbearance ends, your loans will go into delinquency and then default. Default triggers wage garnishment, tax refund offset, and credit damage. Contact your servicer as soon as you know you'll struggle to pay — don't wait until you're behind.

Frequently Asked Questions

Does forbearance hurt my credit score?

Forbearance itself does not appear on your credit report as a negative mark. However, if you miss payments before requesting forbearance, those missed payments will be reported and will hurt your score. Once you're in forbearance, on-time status is maintained. The damage comes from default, not forbearance.

Can I get forbearance if I'm already in default?

No. If your loans are in default, you must rehabilitate them or consolidate them first. Rehabilitation means making nine on-time payments over ten months; after that, your loans come out of default and you can then request forbearance. Consolidation combines your defaulted loans into a new federal loan, which also allows you to request forbearance afterward.

Will forbearance stop wage garnishment?

No. If your wages are already being garnished due to default, forbearance will not stop it. You must rehabilitate or consolidate your loans first. Once your loans are out of default, garnishment stops and you can request forbearance if needed.

How much interest accrues during forbearance?

Interest accrues daily based on your loan balance and interest rate. The exact amount depends on your loan type, rate, and balance. Your servicer can tell you the projected interest before you enter forbearance. If you want to avoid capitalization, ask whether you can pay interest-only during forbearance.

Can I use forbearance more than once?

Yes. On federal loans, you can enter forbearance multiple times, up to three years total. On private loans, it depends on your lender. Each time you enter forbearance, interest accrues and gets capitalized when it ends, so using forbearance repeatedly adds up over time.