Mandatory Forbearances

A Mandatory Forbearance resembles a deferment, in that your lender must grant it to you if you request it and if you qualify. It resembles a forbearance in that you are responsible for interest on your loans during the mandatory forbearance period, even if interest was paid by the government during your in-school period. As in any forbearance period, you may continue to make monthly payments to cover interest, or added to the principal balance of your loan(s). This means that you will pay interest on a higher balance when you resume payments, possibly causing your monthly payment amount to go up.
A mandatory forbearance may be granted for the following reasons:
Internship or ResidencyIf you are a medical intern or resident and you either do not qualify for an internship residency deferment (i.e., the earliest of your outstanding loans was borrowed after 6/30/1993), or you have exhausted your deferment eligibility, you may qualify for mandatory forbearance. To qualify you must be engaged in a program that:
Must be successfuly completed before you may begin professional practice or service, or
Leads to a degree or certificate awarded by an institution of higher education, a hospital, or health care facility offering postgraduate training. The mandatory forbearance for internship/residency is available as long as you continue to meet eligibility criteria.
Debt Exceeds Monthly IncomeThe lender must grant a forbearance in yearly increments for up to three years, if you are obligated to make payments on Title IV loans (i.e., FFELP, Federal Direct Loans, and Federal Perkins Loans) and the total of monthly payments is20% ormore of your total monthly income.
National Service, Loan Forgiveness, or Department of Defense RepaymentThe lender must grant a forbearance in yearly increments for any period during which you:
Serve in a national service position for you receive a national service educational award under the National and Community Service Trust Act of 1993 (AmeriCorps); or
Maintain eligibility for loan forgiveness under the Stafford Loan Forgiveness Demonstration Program (if the program is funded) for performing the required type of service; or
Perform service that would qualify the borrower for partial loan repayment under the Student Loan Repayment Programs administered by the U.S. Department of Defense.
Forbearance
If you have problems that affect your ability to meet your scheduled loan repayments, your lender might grant forbearance. During forbearance, payments are postponed (or in some cases just reduced) due to financial hardship. Interest accrues during this period and is added to the amount you already owe.
To request any type of forbearance, contact your loan holder. If you make the initial contact by telephone, be sure to follow up in writing. Do not assume forbearance has been approved until you receive written confirmation from the lender.
Forbearance During Delinquency
If your loans become delinquent due to non-payment, you will have to “bring them current” before any deferment can be allowed. In many cases, your lender or servicer will grant a forbearance for the time period between the payment due date and the date your loans can enter a deferment status. Any time forbearance is granted, remember that interest accrues on the loans, making them more expensive. Forbearance is not granted automatically, and must be specifically requested.