sactoking
Diamond Member
- Sep 24, 2007
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I'm surprised it took 26 posts but, misleading title. The person in question is not getting their loans "forgiven". Loan forgiveness implies that the principal balance will not need to be repaid. From the OP:
What the person is getting is either a forbearance or a deferral. In a deferral the borrower does not have to make principal and interest payments right now but the interest accrued is capitalized and increased P&I payments will need to be made in the future. In a forbearance the borrower does not have to make payments right now and the accrued interest is waived but P&I payments will need to be made in the future. In neither scenario is principal forgiven.
Currently student loan principal can only be forgiven if you take a public sector/teaching job, and even then you have to make payments for 10 years to have the remaining balance forgiven.
he can hold off making payments
What the person is getting is either a forbearance or a deferral. In a deferral the borrower does not have to make principal and interest payments right now but the interest accrued is capitalized and increased P&I payments will need to be made in the future. In a forbearance the borrower does not have to make payments right now and the accrued interest is waived but P&I payments will need to be made in the future. In neither scenario is principal forgiven.
Currently student loan principal can only be forgiven if you take a public sector/teaching job, and even then you have to make payments for 10 years to have the remaining balance forgiven.