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A forbearance is a temporary modification of the monthly payment obligation on an education loan. Both federal education loans and private student loans offer forbearances, but with different criteria and terms. Forbearance options on private student loans are generally more limited than the forbearance options on federal education loans. There are three main types of forbearances: 1  Temporary cessation of monthly payments. 2  Temporary reduction in the monthly payment amount (e.g., interest-only payments).
With unsubsidized loans, the interest is capitalized (added to the loan balance) if unpaid by the borrower as it accrues. This is in contrast with a forbearance, where the interest is the responsibility of the borrower on both subsidized and unsubsidized loans.Find Private Student Loans for your School:ith unsubsidized loans, the interest is capitalized (added to the loan balance) if unpaid by the borrower as it accrues. This is in contrast with a forbearance, where the interest is the responsibility of the borrower on both subsidized and unsubsidized loans.