A lot of the time, maternity leave means a temporary loss in income. Student Loans and Maternity Leave Some parents get some pay through short-term disability or benefits from their employment. Some people take unpaid leave under the Family and Medical Leave Act (FMLA). This law protects their jobs but not their pay. At the same time, invoices for medical care, childcare, and daily living costs keep coming in. Student Loans and Maternity Leave.
Currently, it can seem as though student loan payments are unchangeable. They don’t automatically change when your income goes down, like rent or utilities do. But the guidelines for federal student loans let borrowers ask for changes that take into account their short-term financial situation, including maternity leave.
Knowing those options before you go can help you avoid missing payments, keep your credit score high, and give you more money during a tough time.
Deferment And Forbearance
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 subsidised federal loans, though it continues to accrue on unsubsidised loans. Student Loans and Maternity Leave.
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. This is our favourite 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. Student Loans and Maternity Leave.
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. Student Loans and Maternity Leave.
This strategy is often more financially favourable 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, the type of loan, and how quickly expenses are expected to rise afterwards. Borrowers who plan ahead (and use federal repayment rules strategically) can protect their finances during one of life’s most significant transitions. Student Loans and Maternity Leave.