I've had to do that a few times in my past, and it always reports "pays as agreed" and doesn't show as late. It may not show a dollar amount, but I'm not sure if it did before anyhow. If the lack of a dollar amount does affect the score, my guess is that it would be negligible, but I'm almost certain it has no negative effect on your credit score.
I can tell you though to triple-check that the forms were received when you send them, because I had paperwork get 'misplaced' so I was reported late before the forebearance on one occasion - that did ding my score.
While owing more may indeed affect the score, they can not report you as in default for being in forebearance, that's wholly incorrect. I consulted past years' credit reports before replying to this. If they were to report it as you say, she could have it amended because default, by definition, means not in agreement with terms. Forebearance is a modification in terms which the lender has accepted, ergo IN agreement with tersm.
If she is facing 200K in loans and just getting out of med school, chances are the payment EVEN AFTER consolidation would be too much, and once you do consolidate, you do not get to forebear or defer again. It's a high-risk strategy with a permanent impact, where LauraK needs a temporary fix until things are better.
You should never stay in forebearance for too long, but consolidation, when cash flow is tight, is NOT the right move in this situation. You do want to consolidate as soon as you know you will be able to make the payments, but not if you do not know how you will make the payments yet!
"once you do consolidate, you do not get to forebear or defer again."
THIS IS NOT TRUE ON FEDERAL LOANS(Staffords, Perkins, etc..!PRIVATE LOAN CONSOLIDATION IS ANOTHER STORY
While I was in med school I consolidated my federal loans when interest rates dropped back in 2004/2005 to then historic lows. After I consolidated they were put immediately back into deferment until I graduated med school. Now the loans are in forbearance and they are consolidated loans.
WORD OF ADVICE TO ALL:
Dealing with the federal governement is the best concerning loans. Always consolidate using the Dept of ED as your servicer and don't consolidate thru private companies under the fed program where a private company is the servicer. FEDS let you do your forbearnc/deferment paperwork online and they approve it within a couple of days compared to private companies. I know alot of med school friends that had a nightmare with private servicers. The FEDS do some things right! LOL
Thanks OTF - I meant forebearance only, deferment due to school I believe was still OK. That was the case with federal loans too when I worked at the university back in 2003 and also when I finally consolidated back in 2005. If I go back to school taking a minimum of 6 credits I can defer (not the same as a forebearance, where your subsidized loans still accrue interest but in a deferment they do not [rather the gov't pays it]).
Also excellent advice about who to consolidate with - there are some major scammers out there.
This is the website for Direct Loans:
They have info on forebearance, deferment, rates, etc.
It is possible that things have changed since I worked in a university setting, so best to check it out yourself. But, back to the original question, they can not report you as defaulting if you are in either of those two because you are "paying" according to terms - the terms are simply that you have a "net 360" or something instead of a "net 30".