Key Points
- Short-term income drops during maternity leave can qualify borrowers for deferment, forbearance, or lower payments under income-driven repayment plans.
- Re-certifying income while earnings are temporarily lower can reduce required monthly payments for up to a year.
- The right strategy depends on whether leave is paid, unpaid, or covered by short-term disability, and whether loans are federal or private.
Maternity leave often coincides with a temporary drop in income. Some parents receive partial pay through short-term disability or employer benefits. Others take unpaid leave under the Family and Medical Leave Act (FMLA), which guarantees job protection but not wages. At the same time, medical bills, childcare planning, and everyday costs continue.
Student loan payments can feel especially rigid in this moment. Unlike rent or utilities, they don’t automatically adjust when income falls. But federal student loan rules allow borrowers to request changes that reflect short-term financial realities, including maternity leave.
Understanding those options before leave begins can prevent missed payments, protect credit scores, and free up cash during a critical period.
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Deferment And Forberance
Two of the most common tools for borrowers on leave are deferment and forbearance – but we don’t think they’re the best. Both allow borrowers to pause payments temporarily, typically for several months at a time. The key difference is how interest is handled.
Deferment is generally available when a borrower meets specific criteria, such as unemployment or economic hardship. Maternity leave, combined with reduced or zero income, may qualify as an economic hardship. During deferment, interest does not accrue on subsidized federal loans, though it continues to accrue on unsubsidized loans.
Forbearance is broader and often easier to obtain, especially if income reduction does not meet formal deferment standards. Payments are paused, but interest accrues on all loan types. That interest may later be added to the loan balance, increasing the total amount repaid over time.
For borrowers on short-term disability who are still receiving partial income, forbearance is often the more accessible option. For those on unpaid leave, deferment may be available, depending on income and loan type.
Both options can provide immediate breathing room, but neither reduces the underlying cost of the loan. They are best viewed as temporary bridges, not long-term solutions.
Income-Driven Repayment: Use Your Lower Income To Your Advantage
For borrowers enrolled in income-driven repayment (IDR) plans, maternity leave can present a strategic opportunity. And this is our favorite approach.
IDR plans base monthly payments on household income and family size. If income drops during leave (and your family size changes due to your newborn), borrowers can request to re-certify their income early rather than waiting for the annual deadline.
That recalculation can lower monthly payments significantly (sometimes to $0) while keeping the loan in good standing.
The reduced payment remains in effect for up to 12 months, even after the borrower returns to work and income rises again. For families facing childcare costs or medical expenses after leave ends, that extended period of lower payments can be especially valuable.
This strategy is often more financially favorable than forbearance because:
- Payments made under IDR still count toward loan forgiveness timelines, where applicable.
- The lower payments continue for 12 months, which gives you time to adjust your finances after having a new baby.
Bottom Line
Maternity leave does not have to derail student loan repayment, but it does require proactive choices. Deferment and forbearance can provide short-term relief, while income-driven repayment adjustments may offer longer-lasting benefits.
The best option depends on income during leave, loan type, and how quickly expenses are expected to rise afterward. Borrowers who plan ahead (and use federal repayment rules strategically) can protect their finances during one of life’s most significant transitions.
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Editor: Colin Graves
The post Student Loans and Maternity Leave: What to Do appeared first on The College Investor.
