NASSGAP - Repository

Author(s):	Price, D
Title:	Student loan forbearance and its relationship to default
Source:	http://www.luminafoundation.org/publications/sy...
Date:	2001
Organization:
Short Description:	Examines whether student loan forbearance succeeds in preventing student loan default by allowing students to delay repayment of loans during times of hardship, or whether this practice ultimately results only in postponement of eventual default.
Annotation:	This paper examines whether student loan forbearance succeeds in its intended purpose of preventing student loan default by allowing students to delay repayment of student loans during times of hardship, or whether this practice ultimately results only in postponement of eventual default. Findings indicate that default rates for loans in forbearance are similar to the overall loan default rate for the Federal Family Education Loan Program, and that while forbearance may have reduced the cost to taxpayers of loan defaults by as much as 4 percent, forbearance substantially increased repayment costs for borrowers who capitalized interest.
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