What is student loan forbearance and is it right for you?

The video tutorial explains student loan forbearance, a temporary relief allowing borrowers to pause payments. It covers the end of the student loan payment freeze in October and introduces two types of forbearance: general and mandatory. General forbearance is discretionary, while mandatory forbearance must be granted if eligibility criteria are met. The video highlights the downside of forbearance, such as accruing interest and its impact on loan forgiveness programs. It concludes by advising viewers to consider forbearance as a short-term solution and explore other repayment options for long-term financial planning.

What is the main difference between general and mandatory forbearance?

• General forbearance is discretionary, while mandatory must be granted if criteria are met.

• General forbearance is automatically granted, while mandatory requires application.

• General forbearance is for specific professions, while mandatory is for financial hardship.

• General forbearance is for private loans, while mandatory is for federal loans.

What happens to the interest on your loan during forbearance?

• Interest is paused along with payments.

• Interest continues to accrue, increasing the total debt.

• Interest is forgiven after forbearance ends.

• Interest is reduced by half.

How does forbearance affect the Public Service Loan Forgiveness Program?

• Forbearance has no impact on loan forgiveness.

• Forbearance speeds up the forgiveness process.

• Months in forbearance do not count towards the required payments.

• Months in forbearance count towards the required payments.

Why might forbearance be considered a short-term solution?

• It converts loans to grants.

• It eliminates the need for future payments.

• It provides temporary relief but increases long-term debt.

• It permanently reduces the loan balance.

What should borrowers consider if they need long-term financial solutions?

• Switching to private loans.

• Ignoring their loan payments.

• Exploring income-based repayment plans.

• Applying for more forbearance.