Forebearance time limits?

[Anonymous]

I think you can get a forebearance for up to 36 months, correct?  What if you transfer to another lender/consolidate...does it give you another 36 months to use or does the used months also follow with the loan?

[LynnInMN]

You mean deferment??   There is a difference between forebarance and deferments.  Deferments are automatic on non defaulted loans if you meet the criteria.  Forebearnaces  are administrative which means that they are granted  subjectively....you have no entitlement.

If you consolidate, you regain new deferment  priveleges.

[Anonymous]

When I called my lender they said I only had one month left to use for a forebearance.  Since I qualified for a deferment they put me down for more time using that instead.  

So if I understand you correctly all lenders abide by and use the same deferment entitlements and use discretion on a forebearance, but if you transfer from one lender to another you basically renew that time/benefit all over again?  Is it a three-year deferment with each lender?

Thanks so much!

[kimg727]

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@Anonymous wrote:
I think you can get a forebearance for up to 36 months, correct?  What if you transfer to another lender/consolidate...does it give you another 36 months to use or does the used months also follow with the loan?

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I've originated, consolidated, serviced and collected federal and private student loans.

You are right; 36 months max for the life of the loan.  However, the forbearances are usually issued in 6 month intervals, depending on the circumstance. Always try for a deferment first, as the government will pay the interest on the subsidized portion (federal loans only).

If you consolidate, it is NOT supposed to start all over again. I can tell you from servicing loans, we hardly ever checked...but some do.  In essence, if not checked, many borrowers just started fresh on the three years when they consolidate.  After all, the lender is just making more money when you do a forbearance.  I could tell you stories on the interest that accrues.

[kimg727]

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@Anonymous wrote:

So if I understand you correctly all lenders abide by and use the same deferment entitlements and use discretion on a forebearance,

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Yes, supposed to anyway. It's federally regulated.  Some of them can be shady in the respect, if you call to defer your payments, they will put you on a forbearance (make more money) instead of a deferment.  Always ask for a deferment.  If you do not qualify, the forbearance is good back up plan.

[kimg727]

I found this good PDF file that outlines for both forbearances and deferments;

http://www.accessgroup.org/Student-Loans/docfiles/DefermentForbearance.pdf

[Anonymous]

Bless you!!!  Kudos heading your way. 

[Anonymous]

MANDATORY administrative forbearances are indeed limited by federal statute, and should not generally exceed 36 months. 

DISCRETIONARY forbearances are exactly that, and are not in any way controlled by any 36-month limit.

DEFERMENTS have already been correctly explained.