If your loans are in forbearance, it’s for one of two reasons: you requested a pause on payments, or your loan servicer placed you there without asking. Both are common, and each points to a different next step. Understanding why your loans are in forbearance matters because interest is almost certainly still accruing on your balance, and the longer you stay in this status without a plan, the more it costs you.
You Asked for a Payment Pause
The most common reason is that you requested it. For federal student loans, this is called general or discretionary forbearance. Servicers can grant it when you’re temporarily unable to pay because of financial difficulty, medical expenses, or a change in employment. You fill out a request, attach supporting documents like pay stubs or medical bills, and the servicer decides whether to approve it. Approval is not guaranteed.
General forbearance lasts up to 12 months at a time, with a cumulative limit of three years.1Federal Student Aid. Student Loan Forbearance If you asked for forbearance during a rough patch and then forgot about it, that’s likely why your account still shows the status now.
A similar dynamic applies to mortgages. If you fell behind after a job loss, natural disaster, or other hardship and called your servicer for help, they may have placed the loan into forbearance to pause or reduce your payments for a set period.
Your Servicer Placed You There
Sometimes you log in and find your loans in forbearance without having requested anything. That happens in two ways.
Mandatory Forbearance
Federal law requires your servicer to grant forbearance in certain situations once you provide documentation. Common triggers include serving in the National Guard when activated by a governor but not qualifying for military deferment, completing a medical or dental residency, and performing teaching service that qualifies for Teacher Loan Forgiveness.1Federal Student Aid. Student Loan Forbearance If you fit one of these, the forbearance status is doing what it’s supposed to do.
Administrative Forbearance
Your servicer or the Department of Education may also apply an administrative forbearance to handle situations you have no control over. Typical reasons include servicer errors, transitions when your loan is being transferred to a new servicer, processing backlogs, and litigation that affects large groups of borrowers. You’ll usually get a notification explaining the status was applied and saying it will stay in place until the underlying issue is resolved.
How to Find Out Which One Applies to You
Call your servicer and ask for the specific reason your account is in forbearance, when it started, and when it’s scheduled to end. If it’s administrative, ask what needs to happen for it to lift. If a form or document is missing, ask what they need from you. Keep notes of who you spoke with and the date. If you can’t get a clear answer, or the servicer isn’t responsive, you can file a complaint with the Consumer Financial Protection Bureau.
A boundary worth knowing: private student loans don’t follow any of these federal rules. Whether your private lender offers forbearance, how long it lasts, and whether they charge for it depends entirely on your loan contract and the lender’s own policies.2Consumer Financial Protection Bureau. Is Forbearance or Deferment Available for Private Student Loans? If your loan is private, call the lender and ask what hardship options exist, and get any agreement in writing.
What Forbearance Is Costing You
The pause on payments is not free. Interest keeps accruing during forbearance on every type of loan, including subsidized federal ones, and if you don’t pay it as it accumulates it can be added to your principal balance. That’s called capitalization, and after it happens, you’re paying interest on interest.3Nelnet – Federal Student Aid. Interest Capitalization On a $30,000 loan at 6%, one year of forbearance adds roughly $1,800 in interest. Once that capitalizes, your new principal is $31,800, and every future interest calculation runs on the higher number. Over a 10-year repayment, that single year can add well over $2,000 to your total cost.
If you can afford interest-only payments while in forbearance, make them. Some servicers will set up automatic interest-only payments so capitalization never hits.
Lost Progress Toward Forgiveness
Months spent in forbearance generally do not count toward Public Service Loan Forgiveness or income-driven repayment forgiveness. If you’re working toward the 120 or 240 qualifying payments those programs require, every forbearance month is a month that doesn’t move you closer. Past temporary federal initiatives, like the one-time IDR account adjustment, credited some forbearance periods, but those windows have closed.
Escrow Shortages on a Mortgage
Homeowners in forbearance face a quieter problem: your servicer still has to pay property taxes and homeowners insurance while your payments are paused. The servicer advances those funds and later collects the shortage from you. Repayment can be spread over up to 60 months, but it does raise your monthly payment when forbearance ends.
What It’s Doing to Your Credit
If you had an approved forbearance agreement in place before you stopped paying, your servicer must continue reporting your account as current to the credit bureaus.4Consumer Financial Protection Bureau. Manage Your Money During Forbearance The same holds for federal student loans in approved forbearance or deferment.
The problem is missed payments before an agreement was in place. If you stopped paying and only asked about forbearance afterward, those earlier missed payments may already be reported as delinquent, and that damage can stick for years. Contact your servicer before you miss a payment, not after.
Even a properly reported forbearance can slow you down if you’re trying to buy a home or refinance. Lenders often want to see several consecutive on-time payments after you exit forbearance before approving a new loan.5U.S. Federal Housing Finance Agency. FHFA Announces Refinance and Home Purchase Eligibility for Borrowers in Forbearance
Options That May Be Better Than Staying in Forbearance
Income-Driven Repayment
For federal student loans, an IDR plan ties your monthly payment to your income and family size. If your income is low enough, your payment can be as low as $0, and that $0 payment still counts toward forgiveness.6USAGov. Resolve Student Loan Payment Problems Forbearance months usually don’t. Ask your servicer to evaluate you for IDR before extending forbearance. Note that the SAVE plan, once the most generous IDR option, was struck down by a federal appeals court in early 2026; PAYE and IBR remain available, so ask which plans you currently qualify for.
Deferment Instead of Forbearance
Both pause payments, but on a subsidized federal loan in deferment, the government pays the interest that accrues, so your balance stays flat.7Consumer Financial Protection Bureau. What Is Student Loan Deferment? Deferment is available for specific situations, including at least half-time school enrollment, active-duty military service, and qualifying economic hardship. If a servicer suggests forbearance, ask them to check whether you qualify for deferment first.
The 6% Rate Cap for Active-Duty Servicemembers
Under the Servicemembers Civil Relief Act, active-duty members can cap the interest rate at 6% on any loan taken out before entering military service, including mortgages, student loans, car loans, and credit cards. The cap applies for the whole period of active duty, and for mortgages it extends an additional year after service ends.8U.S. Department of Justice. 6% Interest Rate Cap for Servicemembers on Pre-service Debts To claim it, send the creditor written notice and a copy of your military orders. You have up to 180 days after service ends to make the request, and the benefit applies retroactively to the date orders were issued. The creditor must forgive interest above 6%, refund what you already paid over that rate, and lower your monthly payment.
How to Get Out of Forbearance
Your servicer will not automatically switch you back to regular payments. You have to act.
If your hardship has passed, call and tell your servicer you’re ready to resume. For student loans, you’ll return to your previous repayment plan or pick a new one. For mortgages, your servicer will walk you through options for the amounts you missed, and this is the point where most homeowners get it wrong: your servicer generally cannot demand a single lump-sum payment on a government-backed loan.9Consumer Financial Protection Bureau. Exit Your Forbearance Carefully You may be offered a repayment plan that spreads the missed amount over several months, a deferral that moves the missed payments to the end of the loan, or a modification that folds them into the balance and lowers your payment. Ask about all three before agreeing to anything.
Your mortgage servicer is required to reach out roughly 30 days before your forbearance period expires, but don’t wait for that call. The earlier you engage, the more options stay on the table.
If you’re still struggling, extending forbearance is possible but should be a last resort because the interest keeps compounding. For federal student loans, apply for IDR. For a mortgage you can’t afford long-term, ask about a permanent loan modification. If your mortgage servicer isn’t responsive, a HUD-approved housing counselor can help you navigate options for free, and the CFPB accepts complaints if the servicer isn’t following the rules.