I recently submitted the required annual proof of income under IBR. My student loan servicer placed my account in forbearance while they readjusted the amount due each month.

1. Does anyone know if entering forbearance causes the interest accrued prior to forbearance to capitalize? I have read that the interest accrued during a forbearance will capitalize but that is peanuts in comparison to what is already accrued.

2. Are student loan servicers required to notify borrowers before they place their accounts into forbearance especially when it results in a capitalization?

Thanks in advance.

Not sure of the exact answer to either question, but, in my experience, a servicer does not need to place an account in forbearance while your IBR proof is being evaluated.

Agree with hoya. When I sent in recertification, I asked my servicer if they would put me on a forbearance, and they said that all forbearances must have my approval before they put one in place, so I never had to. I know that if they put you in an “Administrative Forbearance”, interest will not capitalize. I believe that all other types of forbearances will capitalize.