§685.205. Forbearance. — Inbound Citations

(2) The borrower's repayment of a Direct Loan may also be subject to the deferment provisions in § 685.204, the forbearance provisions in § 685.205, the discharge provisions in § 685.212, and the loan forgiveness provisions in §§ 685.217 and 685.219.

(i) When the borrower is not in a period of deferment under § 685.204 or forbearance under § 685.205, for each month the borrower makes an on-time monthly payment as applied in paragraph (f)(5)(i) of this section and the outstanding principal balance is reduced by less than $50, the Secretary reduces such total outstanding principal of the borrower by an amount that is equal to—

(A) the lesser of—

(1) $50; or

(2) the monthly payment made; minus

(B) the amount of the monthly payment that is applied to such total outstanding principal balance.

(2) To obtain forbearance on a joint Direct Consolidation Loan under § 685.205, both borrowers must meet the requirements of that section.

(d) The Secretary grants forbearance on all of the borrower's title IV loans that are not in default in accordance with § 685.205 and—

(1) Provides the borrower with information about the availability of the income-driven repayment plans under § 685.209;

(2) Does not charge interest on the borrower's loans beginning 180 days from the date the borrower was initially granted forbearance under this paragraph (d) if the Secretary has failed to make a determination on the borrower's claim by that date and continuing until the Department notifies the borrower of the decision.

(ii) For Direct Loans made before July 1, 2026, a borrower who no longer wishes to repay under the IBR plan and who is required to repay under the Direct Loan standard repayment plan in accordance with paragraph (b)(4)(i) of this section may request a change to a different repayment plan after making one monthly payment under the Direct Loan standard repayment plan. For this purpose, a monthly payment may include one payment made under a forbearance that provides for accepting smaller payments than previously scheduled, in accordance with § 685.205(a).

(G) A national service forbearance under § 685.205(a)(4) on or after July 1, 2024;

(E) AmeriCorps forbearance under § 685.205(a)(4);

(13) A borrower may request forbearance during each of the five years of qualifying teaching service in accordance with § 685.205(a)(5).

(ii) Before a forbearance is granted under § 685.205(a)(5)(i), the borrower must—

(A) Submit documentation for the period of the annual forbearance request showing the beginning and ending dates that the borrower is expected to perform, for that year, the type of service described in § 685.217(c); and

(B) Certify the borrower's intent to satisfy the requirements of § 685.217(c).

(H) A national guard duty forbearance under § 685.205(a)(7) on or after July 1, 2024;

(F) National Guard Duty forbearance under § 685.205(a)(7);

(I) A Department of Defense Student Loan Repayment forbearance under § 685.205(a)(9) on or after July 1, 2024;

(G) U.S. Department of Defense Student Loan Repayment Program forbearance under § 685.205(a)(9);

(i) Before July 1, 2028, a borrower repaying Direct Loans under the PAYE, and ICR plan, respectively, under paragraphs (a)(1), (a)(3), or (a)(4) of this section, or who is in an administrative forbearance (as defined under § 685.205(b)) associated with PAYE, or ICR, must elect to repay those Direct Loans under one of the following repayment plans for which they are otherwise eligible before July 1, 2028:

(A) the Repayment Assistance Plan under paragraph (a)(5) of this section;

(B) the IBR plan under paragraph (a)(2) of this section;

(C) the standard repayment plans under § 685.208(b)(1) or (b)(2);

(D) the graduated repayment plans under § 685.208(b)(5), (b)(6), or (g)(7);

(E) the extended repayment plans under § 685.208(b)(3) or (b)(4); or

(F) through June 30, 2028, the PAYE and ICR plans, respectively, under paragraphs (a)(3) and (4) of this section.

(8) To assert a defense to repayment under this paragraph (e), a borrower must submit an application under penalty of perjury on a form approved by the Secretary and sign a waiver permitting the institution to provide the Department with items from the borrower's education record relevant to the defense to repayment claim. The form will note that pursuant to § 685.205(b)(6)(i), if the borrower is not in default on the loan for which a borrower defense has been asserted, the Secretary will grant forbearance and notify the borrower of the option to decline forbearance. The application requires the borrower to—

(i) Certify that the borrower received the proceeds of a loan, in whole or in part, to attend the named institution;

(ii) Provide evidence that supports the borrower defense to repayment application;

(iii) State whether the borrower has made a claim with any other third party, such as the holder of a performance bond, a public fund, or a tuition recovery program, based on the same act or omission of the institution on which the borrower defense to repayment is based;

(iv) State the amount of any payment received by the borrower or credited to the borrower's loan obligation through the third party, in connection with a borrower defense to repayment described in paragraph (e)(2) of this section;

(v) State the financial harm, as defined in paragraph (e)(4) of this section, that the borrower alleges to have been caused and provide any information relevant to assessing whether the borrower incurred financial harm, including providing documentation that the borrower actively pursued employment in the field for which the borrower's education prepared the borrower if the borrower is a recent graduate (failure to provide such information results in a presumption that the borrower failed to actively pursue employment in the field); whether the borrower was terminated or removed for performance reasons from a position in the field for which the borrower's education prepared the borrower, or in a related field; and whether the borrower failed to meet other requirements of or qualifications for employment in such field for reasons unrelated to the school's misrepresentation underlying the borrower defense to repayment, such as the borrower's ability to pass a drug test, satisfy driving record requirements, and meet any health qualifications; and

(vi) State that the borrower understands that in the event that the borrower receives a 100 percent discharge of the balance of the loan for which the defense to repayment application has been submitted, the institution may, if allowed or not prohibited by other applicable law, refuse to verify or to provide an official transcript that verifies the borrower's completion of credits or a credential associated with the discharged loan.

(K) A bankruptcy forbearance under § 685.205(b)(6)(viii) on or after July 1, 2024, if the borrower made the required payments on a confirmed bankruptcy plan;

(J) An administrative forbearance under § 685.205(b)(8) or (9) on or after July 1, 2024; or

(H) Administrative forbearance or mandatory administrative forbearance under § 685.205(b)(8) or (9); and

(J) An administrative forbearance under § 685.205(b)(8) or (9) on or after July 1, 2024; or

(H) Administrative forbearance or mandatory administrative forbearance under § 685.205(b)(8) or (9); and