If a borrower is unable to meet a repayment schedule, a lender may reduce or suspend his or her regular loan payments or lengthen the repayment period because he or she has a financial hardship but does not qualify for a deferment. For example, a borrower may be granted a forbearance if in poor health or encounter other unanticipated personal problems. Mandatory forbearance allows dental residents who are unable to obtain in-school deferment to complete residency training. A lender must grant forbearance in twelve-month increments unless the actual period during which a borrower is eligible is less than twelve months. In all cases, the lender must provide the borrower with a written agreement that explains the terms of forbearance.
Lenders grant forbearance at their discretion, except for mandatory forbearance as discussed above.
In most cases, documentation is required to support the request. Forbearance is always a costly option to the borrower because, unlike deferments, the federal government will not pay the interest that accrues on a borrower s loan during the forbearance period. Forbearance does not adversely affect credit and is usually not counted as part of the student s repayment period. Forbearance options will likely vary by loan type, borrowers should check with their lender for specifics on their loan portfolio. P.O. Box 4609, Utica, NY 13504-4609.