Natural disasters can turn lives upside down, leaving people to deal with unexpected challenges like housing, food security, and financial stability. If you’re a student or recent graduate with federal student loans, navigating loan payments amid such a crisis can add a layer of stress.
Fortunately, the U.S. Department of Education offers disaster forbearance to provide temporary relief so you can focus on rebuilding and stabilizing your life. But what exactly is disaster forbearance, how does it work, and is it the right option for you?
What Is Disaster Forbearance?
Disaster forbearance is a form of student loan payment postponement available to borrowers in areas affected by federally declared natural disasters. Using information from the Federal Emergency Management Agency (FEMA), the Department of Education identifies impacted areas and grants affected borrowers the option to pause their federal student loan payments.
Here’s how it works:
Duration of Relief: Initially, disaster forbearance postpones payments for 90 days. If needed, you can request an extension in 30-day increments. However, there’s a cap—you can’t exceed 12 billing cycles from the date the disaster is declared.
Interest Accrual: While your payments are postponed, interest will still accrue on all loans, both subsidized and unsubsidized. This makes forbearance different from deferment, where subsidized loans don’t accrue interest.
No Automatic Enrollment: Forbearance isn’t applied automatically. You’ll need to contact your loan servicer to request the forbearance on your student loan account. However, your may be contacted by your loan servicer or the U.S. Department of Education to discuss your options if they determine you live in an area impacted by the federally declared natural disaster.
Paperwork: You may be asked to provide documentation to qualify or extend your natural disaster forbearance.
It’s important to note that forbearance doesn’t reduce your loan balance or interest rate. It’s a temporary solution intended to help you regain financial stability in the wake of a disaster.
Are You Required to Use the Forbearance?
No, disaster forbearance is optional. Borrowers in affected areas can choose whether to use this relief option. While your loan servicer may inform you of your eligibility, the decision is entirely yours. Be mindful, though—interest will continue to accrue, which means your overall loan balance will grow during the forbearance period.
For this reason, it’s recommended that you only use the forbearance if you need it. This option is a protection to help you through this challenging time. It’s better to use the forbearance than fall behind on your student loans.
How to Request a Natural Disaster Forbearance
If you’ve been affected by a federally declared natural disaster, you have to authorize the forbearance. If you’re in an affected area listed by FEMA, your loan servicer will likely reach out to notify you of your eligibility. Keep an eye out for communication through phone, email, or mail.
If you haven’t heard from your loan servicer you can reach out to them proactively to request disaster forbearance. At the time of your request, you will be informed if you’re required to provide paperwork or not.
Once approved, your forbearance will be applied for an initial 90-day period. You can extend it further in 30-day increments if necessary—but you will be limited to 12 billing cycles from the date the disaster is declared.
For borrowers working toward Public Service Loan Forgiveness, PSLF, the months you are in a disaster forbearance will be qualifying payments.
What If You’re Currently Enrolled in School?
If you are currently enrolled in school and impacted by a federally declared natural disaster, you will need to determine the actions you need to take to proceed in school. You may have the option to take a leave of absence, which you would want to discuss with your financial aid office.
If you need to transfer, you will need to discuss your situation with your new school.
The U.S. Department of Education does provide guidance for student enrolled in school to help them understand the steps they need to take.
Navigating Disaster Forbearance
Natural disasters bring enough uncertainty and stress into your life. The disaster forbearance program exists to temporarily take student loans off your plate temporarily while you focus on rebuilding. But using this option comes with responsibilities—you’ll need to monitor your interest accrual, make informed decisions about whether postponing payments makes sense, and stay in communication with your loan servicer.
If you need help navigating disaster forbearance or understanding your student loan options, don’t hesitate to reach out to your loan servicer.