Updated
May 15, 2023 If you recently welcomed a baby and are on maternity or paternity leave, the financial changes might make keeping up with your student loan payments a challenge. The good news is your loan servicer may offer options so you can stay afloat.
Borrowers with federal student loans tend to have more options than private student loan borrowers. If you are unsure of your loan type, look at your last loan statement to find out.
We’ll explore how to take advantage of the student loan payment options you might have available during your parental leave, including whether you can defer student loans while on maternity leave.
In this guide:
- What if your maternity leave is paid?
- What if your maternity leave is unpaid?
- Should I pause my payments just because I can?
- What if I can’t afford my original student loan payment due to new expenses?
What if your maternity leave is paid?
Employers are not federally required to offer paid maternity leave, although some do.
The federal government requires employers of a certain size to accommodate a maternity leave of up to 12 weeks. But under the Family and Medical Leave Act, it can be unpaid. Eleven states and the District of Columbia offer paid family and medical leave funded through payroll taxes.
Even if your employer offers some level of paid maternity leave, you might see your income reduced during this time. Your expenses might also rise as you care for a new baby, but your student loan servicer will still expect your on-time payment.
Below is a breakdown of your options to manage your student loan payments while on maternity leave.
| Option | Available for | Result |
| Deferment or forbearance | Federal; certain private lenders | Temporary pause in monthly payment requirements or lower monthly payments |
| Income-driven repayment | Federal | Lower monthly payments |
| Graduated repayment | Federal | Lower monthly payments, which rise every two years |
| Extended repayment | Federal | Lower monthly payments over a longer loan term |
| Contact lender | Federal and private | Varies |
Deferment or forbearance
If your maternity leave stretches your budget too thin, you can request deferment or forbearance. The federal government and some private lenders offer these options. Most servicers require borrowers to be experiencing financial difficulties, medical expenses, a change in employment, or another appropriate reason.
When your loan servicer grans a deferment, you’ll enjoy a temporary postponement of monthly payments. Forbearance is another opportunity for borrowers experiencing financial hardship, which results in temporarily reduced or suspended monthly payments.
Interest accrual during deferment and forbearance
In either case, interest will likely accrue during your deferment or forbearance period, and the period generally will not count toward the requirements of loan forgiveness programs.
The length of these options vary 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.
You’ll need to fill out paperwork with your loan servicer to request a deferment or forbearance. Ask about the process for your situation.
Income-driven repayment
Federal student loan borrowers have access to income-driven repayment 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.
- Revised Pay As You Earn (REPAYE): Pay up to 10% of your income toward student loans. But if you are married and filing separately, you won’t need to include your spouse’s income. After 20 years, the remaining loan balance is forgiven.
- 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.
The online application involves looking up last year’s tax return. But if your income has dropped, you can submit a paper IDR plan request and documentation that reflects your current income. Since the process can take several weeks, it’s best to start this process as soon as possible.
Depending on your new financial situation, you might find lower monthly payments through an IDR plan. You might even find your monthly payments reduced to $0. You’ll need to recertify your income each year, which means your monthly payment will likely rise in tandem with your post-leave income increase.
To pursue this option, submit an application to your loan servicer.
Graduated repayment
Graduated repayment plans are an option for federal student loan borrowers whose income is too high to qualify for most income-driven repayment payments. Under the graduated repayment plan, your monthly payment will increase every two years.
As your payments increase over 10 to 30 years, you’ll face higher monthly payments. If you expect your income to increase over time, this could be the right solution for your situation. Along the way, your payments will always be enough to cover the interest accruing on your loans.
You won’t see your payments eliminated during maternity leave. But you might find a more manageable monthly payment for your budget.
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.
Throughout your maternity leave, you’ll still need to make monthly payments. But the longer repayment term should lead to a more manageable monthly payment. Pursue this option by making a request to your loan servicer.
Contact lender
If you have private student loans that don’t offer deferment, forbearance, or adjusted repayment options, reach out to your lender.
Even if you don’t see an advertised opportunity, your lender might be willing to offer a helping hand during your maternity leave.
It’s often worthwhile to communicate your current financial situation with your lender. In some cases, you might find a solution that alleviates financial pressure during your maternity leave.
What if your maternity leave is unpaid?
If your employer doesn’t offer paid maternity leave, you might decide to move forward with unpaid leave. The Family and Medical Leave act requires employers to accommodate unpaid parental leave of up to 12 weeks.
Unless you have savings to fall back on, a lack of income could make it impossible to keep up with your student loan payments. Let’s explore your student loan options while taking unpaid maternity leave.
| Option | Available for | Result |
| Deferment or forbearance | Federal; certain private lenders | Temporary pause in monthly payment requirements or lower monthly payments |
| Income-driven repayment | Federal | Lower monthly payments |
| Contact lender | Federal and private | Varies |
Deferment or forbearance
If your income disappears while you’re on maternity leave, you might qualify for deferment or forbearance options due to financial hardship. The pathway is clearer for federal student loans, but some private lenders offer deferment and forbearance options.
Borrowers with federal student loans experiencing financial difficulties can reach out to their loan servicer to request forbearance for up to 12 months at a time. When making a request to a private lender, your lender should provide specific guidance on its process.
For federal student loan borrowers, interest will likely accrue during your deferment or forbearance period. The rules may vary if you have a private lender.
Income-driven repayment
Income-driven repayment plans can help federal student loan borrowers tap into a lower monthly payment. Depending on your situation, your monthly payment could drop to $0 with an IDR plan.
But if you are married, your spouse’s income may contribute to the household income, which could mean higher student loan payments.
The application is typically based on the income from your last year’s tax return. However, you can submit a paper application and documentation of a lower income. You’ll need to recertify your income each year, which could lead to a higher monthly payment.
Contact lender
If your private student loan lender doesn’t advertise deferment or forbearance options, it’s worth giving them a call. When you explain the details of your financial situation, the lender might be willing to work out a temporary payment arrangement.
Calling your lender won’t guarantee a helping hand, but it’s wise to reach out and explain the situation.
Should I pause my payments just because I can?
Since 2020, federal student loan payments are paused, so federal borrowers don’t need to make monthly payments. The interest rate on these loans is set to 0%, which means interest is not accruing right now.
The latest guidance is that federal student loan payments are suspended until at least June 30, 2023, but if nothing is resolved by that date, payments could resume at the end of August 2023. If your maternity leave ends before this June deadline or when payments are scheduled to resume, you aren’t required to make payments.
Even if you have the option to pause your payments, that’s not always the right move for your finances. If interest isn’t accruing on your loans, you won’t get stuck paying more over the life of the loan. But if you have private student loans that accrue interest during a pause, every delayed payment leads to a higher cost.
Whether interest is accruing, you might decide to continue making student loan payments a priority. The sooner you pay off the principal, the sooner this burden is out of your life for good.
What if I can’t afford my original student loan payment due to new expenses?
A new baby brings a wave of new expenses into your home. If possible, save for these expenses before your new bundle of joy arrives.
If that’s not possible, seek ways to limit your student loan payment obligations as we laid out above. Some might apply during and after your maternity leave.
If there isn’t a clear option for your loans, consider calling your loan servicer. When you explain the situation, the lender might be willing to make special accommodations for your maternity leave.