How to Handle Student Loans While on Maternity Leave

If you recently welcomed a baby and are on maternity or paternity leave, your loan servicer may offer options to help you stay afloat. We’ll explore how to take advantage of those options, including whether you can defer student loans while on maternity leave.

Can you pause student loan payments while on maternity leave?

The Department of Education only offers designated maternity leave benefits for certain federal loans disbursed before July 1, 1993. However, you may still be able to pause student loan payments during your parental leave if you qualify for deferment or forbearance.

Deferment and forbearance put a temporary pin in your payment obligation, freeing up cash for other expenses or to tuck away until you’re back to work. The main difference between these strategies is how interest accrues:

• Deferment: Interest only accrues on Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Unsubsidized Consolidation Loans. The accrued interest is capitalized (added to your principal balance), and future interest is assessed on your new total balance.
• Forbearance: Interest accrues on all types of Direct Loans, both Subsidized and Unsubsidized. The accrued interest is not capitalized and does not add to your outstanding principal.

Deferment and forbearance, as we discuss them here, primarily apply to federal student loans, but private student loan lenders may have similar programs. 

If you have federal student loans, jump to our federal loans section to learn more about your options. If you have private student loans, jump to our private loans section for recommended next steps.

Options to defer federal student loans while on maternity leave 

Even if your employer offers some level of paid maternity leave, you might see your income reduced during this time. Your expenses could rise as you care for a new baby, and you may wonder how you’ll manage your student loan payments. 

Your federal loans may be eligible for temporary payment modifications, including: 

Option	Result
Deferment or forbearance	Temporary pause in monthly payment requirements or lower monthly payments
Income-driven repayment	Lower monthly payments
Graduated repayment	Lower monthly payments, which rise every two years
Extended repayment	Lower monthly payments over a longer loan term

Deferment or forbearance

If your maternity leave stretches your budget too thin, you can contact your loan servicer to request student loan deferment or forbearance. To qualify, you’ll need to demonstrate financial need or a change in income.

When your loan servicer grants a deferment or forbearance, it will postpone your monthly payments.

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Tip

Interest will likely accrue during your deferment or forbearance period, and the period rarely counts toward the requirements of loan forgiveness programs. 

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The length of these options varies based on your situation. But if you request forbearance or deferment for your federal student loans, you can qualify for up to 12 months at a time. 

Income-driven repayment

Federal student loan borrowers have access to income-driven repayment (IDR) plans. IDR plans reduce your monthly payment requirement to match what the federal government believes your income can support based on your family size. 

Here’s a look at the options:

• Pay As You Earn (PAYE): Pay 10% of your income, up to the amount you would pay on a standard repayment plan. Your spouse’s income is also considered if you file jointly. 
• Saving on a Valuable Education (SAVE): Pay 10% of your discretionary income for 10 to 25 years, with your remaining balance forgiven after your term ends. This replaces the Revised Pay As You Earn (REPAYE) Plan. 
• Income-Contingent Repayment (ICR): Pay either 20% of your discretionary income or the amount you’d pay on a fixed 12-year repayment plan. 
• Income-Based Repayment (IBR): Pay 10% (new borrowers on or after July 1, 2014) or 15% (new borrowers before July 1, 2014) of your discretionary income toward your student loans. 

You can apply for an IDR plan through the Federal Student Aid website or with your loan servicer. The process can take several weeks, so it’s best to start as soon as possible. 

After you apply, your loan servicer may reduce your payment amount—sometimes to $0 a month. You’ll need to recertify your income each year, so your monthly payment will likely rise in tandem with your post-leave income increase.

Graduated repayment

Graduated repayment plans are an option for federal student loan borrowers whose income is too high to qualify for most IDR plans. Under the graduated repayment plan, your monthly payment will increase every two years, for 10 to 30 years. 

If you expect your income to increase over time, this could be the right solution for your situation. While graduated repayment won’t eliminate your monthly payment, it can make payments more manageable during your leave. 

To explore graduated repayment options, contact your federal loan servicer.

Extended repayment

The extended repayment plan offers federal student loan borrowers a longer period to repay their loan balance. You can stretch out your loan repayment for up to 25 years, leading to lower monthly payments. 

Your payments won’t be reduced to $0, but due to the longer loan term, they should be more affordable. Contact your loan servicer to see if extended repayment makes sense in your situation.

Options to defer private student loans while on maternity leave

If you have private student loans, reach out to your lender to see whether it offers deferment, forbearance, or adjusted repayment options.

Even if you don’t see an advertised opportunity, it’s still worth communicating your financial situation. 

At the very least, looking for solutions with your lender puts you in a far better position than procrastinating. Your lender might be willing to leverage hardship assistance, work out a promise-to-pay agreement, or extend similar benefits during your maternity leave—but you won’t know if you don’t ask.