Department Provides Guidance on Forbearance for Hurricane-Affected Borrowers

The U.S. Department of Education has announced that lenders may grant an administrative forbearance on the Federal Family Education Loan Program loans of borrowers who are awaiting hurricane-relief discharge of their loans. Lenders must notify the borrower — or, if applicable, the endorser — that the forbearance has been applied to the loans.

For borrowers for whom the hurricane discharge will relieve only a portion of a loan, the Department will permit lenders to process the forbearance, but lenders must ensure that they advise the borrowers of the portion of the loan to which the forbearance applies and that the borrower still is obligated to repay the remainder of the loan. 

For more information, contact USA Funds^®’ policy advisers. USA Funds’ Web site provides resources for lenders, schools and borrowers affected by hurricanes of the past year.