How to Afford Having a Baby While Paying Your Student Loans

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In August 2010, when our first child was born, my husband and I owed about $35,000 in student loans.

To make matters more complicated, my husband and I had moved to a new state during my pregnancy so he could take a new job. I took a year off from my previous career of teaching, and we bought a house in our new town, even though it took nearly a year to sell our previous residence.

In short, it did not look like we were in the best financial shape to welcome a new baby — especially considering the fact that the USDA estimates it costs about $233,610 to raise a child from birth to age 18. And that nearly-quarter-of-a-million-dollar price tag does not include college costs.

This cost estimate might convince many student loan borrowers that there is no way they can afford a baby and deal with student loans while on maternity leave. But it is possible to fulfill your dreams of starting a family before you pay off your student debt.

Here’s how to afford having a baby while you pay your student loans — even during maternity leave.

Create a post-baby budget ASAP

Before you start trying for a baby (or as soon as you know a little surprise is on their way), sit down and calculate your post-baby budget.

Now is the time to estimate your expenses for everything from diapers to childcare to medical care. You’ll also want to consider how you’ll continue to pay off your student loans during maternity leave when you aren’t receiving your full income. The First Year Baby Costs Calculator from can give you a good introduction to the various costs to consider and what you can expect in your area of the country.

Once you have a sense of how your monthly budget will change post-baby, commit to living on that budget starting today. This will help you get used to living on a reduced amount while also allowing you to bank the extra money to build a financial cushion for when baby arrives.

Live on one income as a test run

Living on two incomes can help ease financial stress and allow couples to pay down debts more quickly. If you’re preparing to go on maternity leave and still need to pay your student loans, you can try living solely on one partner’s income for a period of time. Adjusting your lifestyle to one income can be tough, but it will help you understand what life will be like in nine short months.

To do this, assess your current expenses and budget around one income only. This will give you a clear idea of what it would be like to live on one income, which could be the case during maternity leave or if you decide to stay home with your baby indefinitely. If you can make do with one income, you’ll be in a better position to continue paying student loans on maternity leave and afterward.

Explore waiting for a break in expenses

While life is often unpredictable, there are typically some times when money is flowing and others when money’s lean. For example, you could be paying money toward medical debt or car repairs but know there is an end date in sight. If you’re considering having a child but are worried about student loans on maternity leave and in the months afterwards, you may want to wait to get pregnant until there is a break in expenses.

Consider trying for a baby once your temporary or one-off expenses have been paid off, which will increase your cash flow. This will make it easier to free up some income to put toward the baby fund while still chipping away at your student loan debt.

Reduce your student loan payment

For many expectant parents, no amount of budgeting and fat-cutting can make their current student loan payments work with maternity leave and new baby costs. That’s when it’s a good idea to start exploring options for reducing student loan payments or considering maternity leave student loan deferment.

Discretionary forbearance

The option of discretionary forbearance allows you to postpone or reduce monthly loan payments for up to 12 months during a period of financial hardship.

Since having a baby does not qualify for mandatory forbearance — wherein your lender is required to grant you a postponement of payments — you will have to request your forbearance with your lender and continue making your normal monthly student loan payments on maternity leave until you are officially enrolled in forbearance.

Requesting a forbearance can be very helpful to borrowers without access to paid maternity or paternity leave, since it can put your student loan payments on hold during the time that you are not working.

Apply for an income-driven repayment plan

Uncle Sam recognizes that not all federal student loan borrowers are able to swing the standard repayment schedule, which is why borrowers may enroll in income-driven repayment plans. These plans allow you to reduce your monthly payment based upon how much you earn and the size of your family. As an expectant mother with student loans, this is worth considering so you can pay your student loans on maternity leave.

Here are some of the options available:

  • Pay As You Earn (PAYE) is available for anyone who was a new borrower as of Oct. 1, 2007 and who received a direct loan disbursement on or after Oct. 1, 2011. PAYE allows your monthly payments to be capped at 10% of your discretionary income, and your payments will never be higher than what they would be through the Standard Repayment Plan.
  • REPAYE is very similar to PAYE, except that more borrowers are eligible. Additionally, your cap of 10% of discretionary income could be higher than your standard payment amount, depending on your income.
  • Income-Based Repayment (IBR) caps your monthly payment at 10% to 15% of your discretionary income, depending on when you took out your loans. To qualify for IBR, you generally need to owe more than your annual salary. Also, like PAYE, you must be a new borrower as of Oct. 1, 2007 and have received a disbursement of a direct loan on or after Oct. 1, 2011.
  • Income-Contingent Repayment (ICR) caps student loan payments at the lesser of two options: 20 percent of discretionary income, or what the payment would be on a fixed, 12-year payment plan, adjusted according to income. Like the REPAYE plan, ICR is available for most borrowers.

Switch to a graduated repayment plan

If you anticipate that your income will increase over the years and you just need a reduction in monthly payments on your student loans while on maternity leave and for the first few years after your baby is born, consider a graduated repayment plan.

With these plans, your payments start out lower but increase over time, generally every two years. You can expect payments under such a plan to be spread out over the course of 10 years, which makes this a good option for new parents in fields with strong future earning potential.

Most federal loans are eligible for a graduated repayment plan.

Get on an extended repayment plan

If you’re looking to get pregnant or are currently pregnant, an extended repayment plan on student loans can ease the burden during maternity leave and beyond. Borrowers are allowed to extend their repayment schedule for up to 25 years and make fixed or graduated payments during that extended time. While tacking more time onto your repayment schedule does mean you will end up paying more overall for your student loans, it can make enough of a difference right now to make starting a family much more financially feasible.

Take advantage of tax breaks

You’re probably aware that you can deduct student loan interest from your adjusted gross income (AGI) on your annual tax return. But your little bundle of joy also comes with some helpful tax breaks that can help you to better afford your child’s care and feeding.

Child Tax Credit

Taking advantage of the Child Tax Credit can help offset the cost of student loans during maternity leave. Unlike the exemption, which reduces the amount of income you need to pay taxes on, the child tax credit reduces your tax bill by up to $2,000 per qualifying child. Married couples filing jointly with an income below $400,000 and single parents with an income below $200,000 qualify for this credit.

As of 2018, the Child Tax Credit is partially refundable. Previously, a family with two children who had a tax liability of $1,500 would actually owe nothing to the IRS because of their $4,000 child tax credit — but they would also not receive the $500 difference in the form of a refund. However, families in that situation now may still receive a refund up to $1,400 because of the Additional Child Tax Credit.

Additional Child Tax Credit

While the child tax credit is only partly refundable, the Additional Child Tax Credit is fully refundable. That means that even if you lose out on a refund through the Child Tax Credit, you may still be eligible for one through the Additional Child Tax Credit.

If your Child Tax Credit is higher than the taxes you owe and your earned income is greater than $3,000 for the year, then you will receive your credit refund in one of two ways:

  • As the amount of unused child tax credit. In the example of a family with two kids and a $1,500 liability, then unused credit would be $500
  • 15% of your taxable earned income over $2,500

You will receive whichever of these two amounts is lower. Form 1040 (Schedule 8812) can help you determine if you are eligible for the Additional Child Tax Credit. Any e-file software will calculate the child tax credit and any additional child tax credit computations for you.

You can afford a baby while paying off student loans

Owing money on your student loans is no reason to put your dreams of a family on hold. It certainly makes sense to work hard to get your financial house in order before you welcome a new baby, but it’s also possible to make major life changes and deal with student loans on maternity leave before you send in that final payment. Just be willing to make savvy financial choices and strategic sacrifices to be ready for the stork’s special delivery.

This report was originally published April 4, 2016.

Sage Singleton Evans contributed to this report.

Interested in refinancing student loans?

Here are the top 8 lenders of 2020!
LenderVariable APREligible Degrees 
Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.

Earnest Disclosures

To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.

Earnest fixed rate loan rates range from 2.94% APR (with Auto Pay) to 5.98% APR (with Auto Pay). Variable rate loan rates range from 1.89% APR (with Auto Pay) to 5.98% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of February 4, 2020, and are subject to change based on market conditions and borrower eligibility.

Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.

The information provided on this page is updated as of 2/24/2020. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit, email us at, or call 888-601-2801 for more information on our student loan refinance product.

© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.

2 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance: Fixed rates from 3.20% APR to 6.48% APR (with AutoPay). Variable rates from 2.31% APR to 6.48% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.31% APR assumes current 1 month LIBOR rate of 1.81% plus 0.75% margin minus 0.25% for AutoPay. If approved for a loan, the fixed or variable interest rate offered will depend on your credit history and the term of the loan and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. See eligibility details. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.

3 Important Disclosures for Figure.

Figure Disclosures

Figure’s Student Refinance Loan is a private loan. If you refinance federal loans, you forfeit certain flexible repayment options associated with those loans. If you expect to incur financial hardship that would impact your ability to repay, you should consider federal consolidation alternatives.

4 Important Disclosures for Laurel Road.

Laurel Road Disclosures

Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. Mortgage lending is not offered in Puerto Rico. All loans are provided by KeyBank National Association.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.

This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.


There are no origination fees or prepayment penalties associated with the loan. Lender may assess a late fee if any part of a payment is not received within 15 days of the payment due date. Any late fee assessed shall not exceed 5% of the late payment or $28, whichever is less. A borrower may be charged $20 for any payment (including a check or an electronic payment) that is returned unpaid due to non-sufficient funds (NSF) or a closed account.


For bachelor’s degrees and higher, up to 100% of outstanding private and federal student loans (minimum $5,000) are eligible for refinancing. If you are refinancing greater than $300,000 in student loan debt, Lender may refinance the loans into 2 or more new loans.
For eligible Associates degrees in the healthcare field (see Eligibility & Eligible Loans section below), Lender will refinance up to $50,000 in loans for non-ParentPlus refinance loans. Note, parents who are refinancing loans taken out on behalf of a child who has obtained an associates degrees in an eligible healthcare field are not subject to the $50,000 loan maximum, refer to for more information about refinancing ParentPlus loans.


Borrower, and Co-signer if applicable, must be a U.S. Citizen or Permanent Resident with a valid I-551 card (which must show a minimum of 10 years between “Resident Since” date and “Card Expires” date or has no expiration date); state that they are of at least borrowing age in the state of residence at the time of application; and meet Lender underwriting criteria (including, for example, employment, debt-to-income, disposable income, and credit history requirements).

Graduates may refinance any unsubsidized or subsidized Federal or private student loan that was used exclusively for qualified higher education expenses (as defined in 26 USC Section 221) at an accredited U.S. undergraduate or graduate school. Any federal loans refinanced with Lender are private loans and do not have the same repayment options that federal loan program offers such as Income Based Repayment or Income Contingent Repayment.

All loans must be in grace or repayment status and cannot be in default. Borrower must have graduated or be enrolled in good standing in the final term preceding graduation from an accredited Title IV U.S. school and must be employed, or have an eligible offer of employment. Parents looking to refinance loans taken out on behalf of a child should refer to for applicable terms and conditions.

For Associates Degrees: Only associates degrees earned in one of the following are eligible for refinancing: Cardiovascular Technologist (CVT); Dental Hygiene; Diagnostic Medical Sonography; EMT/Paramedics; Nuclear Technician; Nursing; Occupational Therapy Assistant; Pharmacy Technician; Physical Therapy Assistant; Radiation Therapy; Radiologic/MRI Technologist; Respiratory Therapy; or Surgical Technologist. To refinance an Associates degree, a borrower must also either be currently enrolled and in the final term of an associate degree program at a Title IV eligible school with an offer of employment in the same field in which they will receive an eligible associate degree OR have graduated from a school that is Title IV eligible with an eligible associate and have been employed, for a minimum of 12 months, in the same field of study of the associate degree earned.


The interest rate you are offered will depend on your credit profile, income, and total debt payments as well as your choice of fixed or variable and choice of term. For applicants who are currently medical or dental residents, your rate offer may also vary depending on whether you have secured employment for after residency.


The repayment of any refinanced student loan will commence (1) immediately after disbursement by us, or (2) after any grace or in-school deferment period, existing prior to refinancing and/or consolidation with us, has expired.


After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship.

We may agree under certain circumstances to allow a borrower to make $100/month payments for a period of time immediately after loan disbursement if the borrower is employed full-time as an intern, resident, or similar postgraduate trainee at the time of loan disbursement. These payments may not be enough to cover all of the interest that accrues on the loan. Unpaid accrued interest will be added to your loan and monthly payments of principal and interest will begin when the post-graduate training program ends.

We may agree under certain circumstances to allow postponement (deferral) of monthly payments of principal and interest for a period of time immediately following loan disbursement (not to exceed 6 months after the borrower’s graduation with an eligible degree), if the borrower is an eligible student in the borrower’s final term at the time of loan disbursement or graduated less than 6 months before loan disbursement, and has accepted an offer of (or has already begun) full-time employment.

If Lender agrees (in its sole discretion) to postpone or reduce any monthly payment(s) for a period of time, interest on the loan will continue to accrue for each day principal is owed. Although the borrower might not be required to make payments during such a period, the borrower may continue to make payments during such a period. Making payments, or paying some of the interest, will reduce the total amount that will be required to be paid over the life of the loan. Interest not paid during any period when Lender has agreed to postpone or reduce any monthly payment will be added to the principal balance through capitalization (compounding) at the end of such a period, one month before the borrower is required to resume making regular monthly payments.


This information is current as of February 25, 2020 and is subject to change.

5 Important Disclosures for Splash Financial.

Splash Financial Disclosures

Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers.

6 Important Disclosures for College Ave.

College Ave Disclosures

College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.

1College Ave Refi Education loans are not currently available to residents of Maine.

2All rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.

3$5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.

4This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

Information advertised valid as of 1/1/2020. Variable interest rates may increase after consummation.

7 Important Disclosures for CommonBond.

CommonBond Disclosures

Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 1.68% effective January 10, 2020.

8 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it  endorse,  any educational institution.

Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of  5 years and is reserved for applicants with FICO scores of at least 810.

As of 12/019/2019 student loan refinancing rates range from 1.90% to 8.59% Variable APR with AutoPay and 3.49% to 7.75% Fixed APR with AutoPay.

1.89% – 5.98%1Undergrad
& Graduate

Visit Earnest

2.31% – 6.48%2Undergrad
& Graduate

Visit SoFi

1.93% – 6.68%3Undergrad
& Graduate

Visit Figure

2.29% – 6.65%4Undergrad
& Graduate

Visit Laurel Road

1.99% – 7.06%5Undergrad
& Graduate

Visit Splash

2.62% – 6.12%6Undergrad
& Graduate

Visit College Ave

1.77% – 6.25%7Undergrad
& Graduate

Visit CommonBond

1.90% – 8.59%8Undergrad
& Graduate

Visit Lendkey

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

Published in Big Money Decisions, Student Loan Repayment