Student Loans

Effective Date: 07/01/00

Procedure Statement 13: Forbearance Transactions


Policy

Forbearance transactions should be used to place a borrower's account on a temporary repayment schedule. The renegotiated repayment plan must be approved by the Loan Officer.

  1. The loan officer renegotiates a minimum payment with the borrower making sure payment covers monthly interest amount and at least a penny of principal. Calculates number of months the account should remain in forbearance.

  2. Mails new repayment schedule to borrower with cover letter and files copies and other forbearance documentation in borrower's folder.