Quick overview
Forbearance pauses or reduces loan payments when you face short-term hardship. That relief can be vital — but it comes with trade-offs for income-driven repayment (IDR) eligibility and long-term cost. Most importantly, time spent in forbearance usually doesn’t count as a qualifying payment under IDR plans or for forgiveness programs such as Public Service Loan Forgiveness (PSLF). Interest typically keeps accruing during forbearance and can capitalize when the forbearance ends, which raises future IDR-calculated payments.
(Authoritative sources: U.S. Department of Education student aid pages on forbearance and repayment: https://studentaid.gov/manage-loans/repayment/forbearance and IDR plans: https://studentaid.gov/manage-loans/repayment/plans/income-driven. Consumer Financial Protection Bureau discussion of forbearance: https://www.consumerfinance.gov/.)
What happens to qualifying payments during forbearance?
- IDR qualifying payments: To count toward IDR forgiveness (the fixed-term forgiveness after required qualifying payments), most programs require that you make qualifying monthly payments while enrolled in a qualifying repayment plan. Months in forbearance are normally not “qualifying payments.” That means the clock toward forgiveness does not advance while you’re in forbearance.
- PSLF: For Public Service Loan Forgiveness, qualifying payments must be made under an eligible repayment plan while employed full-time by a qualifying employer. Forbearance months generally do not count toward PSLF. (See the Department of Education guidance at https://studentaid.gov/.)
Note: Temporary or limited administrative waivers in the past have made some nonpayment months count; these were policy responses, not the baseline rule. Always check recent Department of Education guidance and communications from your servicer for time-limited exceptions.
How interest accrual and capitalization affect future IDR payments
- Interest accrues during forbearance on most federal loans, except in rare subsidized scenarios. This unpaid interest can capitalize (be added to the principal) when the forbearance ends, depending on loan terms and whether the loan was transferred or consolidated.
- Because IDR monthly payments are calculated using your outstanding loan balance and discretionary income, a higher principal after capitalization usually raises the dollar amount of future IDR payments even if your income hasn’t changed.
Example (simple):
- Start: $30,000 balance, IDR payment $150/month.
- Forbearance: 6 months of unpaid interest $300 (example) capitalizes.
- New balance: $30,300; after recalculation, monthly IDR payment could rise to ~$152–160 depending on plan formulas and rounding — compounded effects are larger with longer or repeated forbearances.
Because the SAVE plan and other modern IDR rules provide stronger interest protections for low-income borrowers, the short-term rise in monthly payments may be limited for some borrowers — but capitalization remains a concern for many (see SAVE plan overview: https://studentaid.gov/save-plan).
Recertification and payment recalculation after forbearance
- IDR plans require annual income recertification. When you recertify and exit forbearance, your servicer recalculates your payment using your current income and the then-current principal balance (which may include capitalized interest).
- If you recertify while in forbearance, you still may have to make a payment once the forbearance ends. Servicers are required to notify you of the new payment amount and when it takes effect.
How different types of forbearance or special programs can change the result
- Voluntary vs. Mandatory Forbearance: Rules are similar for counting payments — months in either type usually do not count as payments toward IDR or PSLF.
- Deferment: Unlike general forbearance, certain deferments (e.g., in-school, military, or economic hardship deferments) have specific rules. Subsidized loans don’t accrue interest during some deferments, which can limit balance growth.
- Administrative or disaster-related forbearances and policy waivers: Occasionally, the Department of Education or Congress authorizes special programs where paused months count for forgiveness or where interest is suspended (for example, pandemic-era relief). These are exceptions and typically time-limited.
Who is most affected?
- Borrowers aiming for forgiveness: If you plan to pursue IDR forgiveness or PSLF, forbearance delays progress toward the required payment count.
- Low-income borrowers: Even though modern IDR rules (like the SAVE plan) reduce monthly percentages of discretionary income and add interest protections, capitalized interest after forbearance can still push payments up if your balance grows.
- Borrowers with high interest or long loan histories: The effects compound over repeated forbearances and longer terms.
Alternatives to forbearance to protect IDR eligibility
- Switch to an IDR plan: If payments are unaffordable, enrolling in an IDR plan often reduces payments without pausing qualifying-payment progress. See FinHelp’s guide on income-driven repayment plans for details: [Income-Driven Repayment Plans](
