what is an administrative forbearance

An administrative forbearance is a temporary postponement of student loan payments, granted by the lender. During this period, payments to federally held student loans have been automatically paused or suspended, and interest rates are usually reduced to 0% . There are two types of administrative forbearance: mandatory and discretionary. Mandatory forbearance is required by law and is granted in certain situations, such as during a medical residency or if the borrower is serving in a national service position. Discretionary forbearance is granted at the lenders discretion and is typically used in cases of financial hardship or illness. If a borrower is granted a forbearance, they are still responsible for the interest that accrues during the forbearance period, which will be added to the total amount owed. An administrative forbearance means that no payments will be due during that month.