Another Friday leads us to another deferment/forbearance spotlight. Today we will look at the Student Loan Debt Burden Forbearance.
What it is: A forbearance designed to help you if your student loan debt takes up a significant portion of your income.
Eligibility Requirements: How significant? 20% to be exact. If your monthly loan payment is 20% of your monthly gross income, you will qualify for this forbearance.
How long is this Forbearance for: For post 7/1/93 loans (many rules were different before then) you get 3 years of forbearance. You can use up to 12 months at a time for this forbearance
Why it may not be the best idea: During this forbearance, interest still accrues so if you are able to get on an Income Driven plan or qualify for a deferment it is a better idea. However since you do have to qualify for it, it is often a better idea than the General Forbearance so you still can keep that forbearance available if needed
Once again, for any forbearance or deferment it is best to visit your servicer’s website or contact them by phone or email for details. Some forbearances/deferments can be done verbally, some online, while some require a form. Depending on your circumstances, it can vary how you apply for this forbearance. As always, it is best to talk to your servicer for details!