If you’re about to be a mother, whether it’s for the first time or not, then you’ve probably thought about all the changes in your life that are coming — especially in the area of finances. Having a baby alters your financial picture. If you take maternity or paternity leave, those changes can be even more pronounced.

If you have student loans in repayment, you may find it difficult to make monthly loan payment with a new baby, and you might be wondering how to make it work. Choosing to take maternity or paternity leave — and possibly go without your income during that time — can wreak havoc on both your student loans and your credit, if you aren’t careful.

There are some strategies that can help ease the transition, at least when it comes to your finances.

Student Loan Repayment On Maternity Leave

Just as mortgages, auto loans, and the electricity bill are still due during your maternity or paternity leave, your student loans obligations also remain. There are, however, options to help if you have federal student loans.

Deferment or forbearance can give you a bit of breathing room while you get through the first month or two of baby’s life. It’s not a perfect solution, but it’s better than not making payments.

You could also consider changing your repayment plan to one of the many options available to federal student loan borrowers. Even a temporary change can help reallocate your money toward caring for your child while keeping your credit score intact and decreasing your loan balance.

Family Leave Deferment

If you have a federal student loan, you can ask for a parental leave/working mother deferment, which offers you time without payments. Becoming a new mother isn’t cause for an automatic deferment, like a job loss or serious illness, and so you’ll have to work with your servicer directly to request this type of deferment. Navient, one of the largest federal loan servicers, offers information about this deferment on their website.

To be eligible, you’ll need to either be pregnant or have a baby less than six months old. You must prove this via a birth certificate or doctor’s statement confirming your pregnancy. In addition, you cannot be working full-time or attending school during the deferment period. If you’re hoping to ask for a deferment without taking the time off work, you’ll find your request denied. The maximum length of a deferment is six months.

Forbearance

A forbearance allows you to either make a smaller payment or postpone payments completely. Like the deferment, you’ll need to contact your servicer and request it. Depending on your situation, they may approve or deny the request. If it’s approved, you can take some time off of your student loans while you’re off work. Just be aware that even during a forbearance, interest continues to accrue, which means your total balance will increase during that time.

Income-Based Repayment Plan

If you’d prefer to keep making payments but just need the amount reduced, you can apply for a new income-based repayment plan. The Income-Based Repayment (IBR) plan caps your monthly payment at 10 to 15 percent of your discretionary income. And since it’s also based upon the size of your family, it will account for the fact that your family size has changed, and your discretionary income has decreased. To apply, contact your loan servicer.

Pay As You Earn (PAYE) Plan

Another option is the Pay As You Earn (PAYE) plan, which allows you to pay 10 percent of your income, but only up to the payment amount you would have paid on the standard plan. Because the income and family size are reassessed each year, this plan is great for growing families. It allows you to get a temporary reprieve with lower payments. Then, as you further your career and increase your income, your payment gets back on schedule. Your servicer can help get you set up with the PAYE plan. Your spouse’s income is only counted if you file taxes as married jointly.

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Revised Pay As You Earn (REPAYE) Plan

Under the Revised Pay As You Earn (REPAYE) plan, you’ll pay the same 10 percent of your income, with annual reassessment of your situation. You won’t, however, get a break from counting your spouse’s income. With REPAYE, all income counts regardless of how you file your taxes. The good news is that anything left on your balance will be forgiven after 20 years. Talk to your servicer to see if it’s a good fit.

Income Contingent-Repayment (ICR) Plan

The Income Contingent-Repayment (ICR) plan is either 20 percent of your discretionary income, or what you’d pay on a fixed repayment for 12 years, whichever is less. Just as in the other options, you must update your income and family size each year even if nothing changed. In addition, you may have to pay taxes on any amount that is forgiven because the government considers it income. It does, however, work on subsidized, unsubsidized, PLUS, and even consolidation loans, and can be applied for with your servicer.

Budgeting for a Baby

There’s no way around it — having a baby brings a lot of new expenses. From the things you’ll need to buy before the baby comes, to the mountains of diapers, bottles, and other things your child will need in their first year, you’ll need to figure out how much that will cost and how to correctly budget for it. Babycenter.com has a calculator that can help you break down what your child will cost in a given year. You can divide that number by 12 to understand the monthly costs.

Then, you’ll want to identify where you can cut back, if possible, to continue meeting your monthly student loan obligations. For some, that might mean eating out less and bypassing the afternoon latte. For others, it’ll require a full restructuring of the budget — especially if you plan to take maternity leave. Since most maternity leaves are unpaid, you’ll need to consider expenses, monthly bills, or other obligations that normally come out of your paycheck and add those to the budget for the time that you’re home.

After you get a handle on what your finances will look like and you have a functional budget, don’t wait for your child to arrive before trying to live on that budget. In fact, the sooner you start cutting back, the better. That way, you can get a head start on saving, and you’ll also be able to adjust any facets of your budget that prove unworkable.

The Bottom Line

Having a baby should be a fantastic, joyful experience. But caring for a newborn brings enough stress without the anxiety of how you’ll pay student loans while you’re on maternity or paternity leave. The best time to plan for your new family member is long before you bring them home. Take the time to talk to your servicer, make a budget, and prepare your finances for your baby.