Should I Make Payments on Student Loans in Forbearance?

Should I Make Payments on Student Loans in Forbearance? article image.

Dear Experian,

I noticed my federal loans are now in forbearance until September 2021 due to COVID-19, but when I log in, it says I can still make payments if I want to. Is there a benefit to making payments during this time?


Dear STL,

Yes, there are benefits to making payments on your student loans while they're in forbearance. Due to the ongoing pandemic, the automatic federal student loan forbearance that was put in place as a result of the CARES Act has been extended until at least September 30, 2021. During this time, interest will not accrue, which means any payments made while still in forbearance will go directly to your principal. Although you won't have a due date or a set payment amount, you can take advantage of the temporary 0% interest by continuing to make payments as you are able. Doing this can help you reduce your balance faster than if part of each payment made was going toward paying interest.

If you are struggling financially, taking advantage of this forbearance period can give you a little room in your budget so you can stay on top of other debt payments. However, if your situation changes and allows you to make some payments toward your student loan going forward, it may be wise to do so—even if you are not able to consistently make the full payment amount that you were making prior to forbearance. The more you are able to pay down your loan now, the better position you will be in when the time comes to begin your repayment schedule again.

Will Having My Student Loans in Forbearance Hurt My Credit Scores?

The automatic government-initiated student loan forbearance that was put in place during the COVID-19 pandemic is not considered negative as far as your credit is concerned. As long as your account remains in forbearance, the payment status on your credit report will continue to appear as it did when the account was placed into forbearance. This means that if your accounts were current when the forbearance period began, the loan servicer will continue to report them as current until you resume regular payments. Your credit scores will not be penalized for not making payments during this time.

How Do Student Loans Affect Credit History?

Student loans affect your credit report and credit scores, including FICO® Scores , the same way any other debt on your credit report does. Account information, such as the amount of the loan, your monthly payment amount and your payment history are all factored in when a credit score is calculated.

Just like with any other debt, the impact of your student loans on your credit history depends on how well you manage the account. When your account is not in forbearance, making all your payments on time will help you build a strong credit history and boost your credit scores. On the other hand, missing payments will almost certainly damage your credit history and hurt your credit scores.

Because late payments remain on your credit report for up to seven years, making your student loan payments on time, every time, is important. If you are struggling to make your payments or think that you may miss a payment deadline, you should contact your student loan provider to discuss your options before your account becomes past due. Even when your loans are no longer in forbearance, your lender may be able to work with you by offering payment accommodations that can help you stay current on your loans.

Thanks for asking.

Jennifer White, Consumer Education Specialist