There’s so much uncertainty surrounding pregnancy. Will you have a boy or a girl? How will pregnancy impact your health? Will you be able to work while you are pregnant? When will that baby *actually* come? One thing should be certain though, and that’s how your student loans will be impacted if you are banking on both PSLF and maternity leave.
The truth is there is a ton of uncertainty surrounding PSLF. This year, less than 1% of student loan borrowers who were banking on PSLF had their applications rejected (in other words, they didn’t receive forgiveness). So let’s start with a little discussion on PSLF and what you should be doing to make sure you qualify. [Related: How to Not Get Screwed by PSLF]
First, you are hopefully aware that the PSLF program is PICKY. You have to be doing everything exactly right in order to receive forgiveness after you’ve made 10 years of qualifying payments. You have to fill out the paperwork EXACTLY correct. Your employer also has to fill out their portion of the paperwork exactly correct.
In addition, you need to make sure that you have loans that qualify for PSLF. For example, FFEL loans do NOT qualify. If you have loans that don’t qualify, you can consolidate your loans to a direct loan that DOES qualify.
You also need to ensure that you are on a payment plan that qualifies for PSLF (such as REPAYE, PAYE, IBR, ICR. The Standard plan technically qualifies but you’ll maximize your savings under one of the income driven repayment plans. Watch out for the Standard Repayment Plan for Direct Consolidated Loans– it doesn’t qualify for PSLF).
With that being said, here’s how PSLF and maternity leave impact each other.
PSLF AND MATERNITY LEAVE
Under the Public Service Loan Forgiveness (PSLF) program through the Family Medical Leave Act, you can take three months of leave from your job per year. (See for yourself on the government’s website here). In other words, if you are only taking three months of maternity leave under the Family Medical Leave Act, then you can still qualify for PSLF. If you don’t want to stop the clock so to speak, in terms of when the balance of your loans will be forgiven, you should continue making qualifying payments during your maternity leave. Obviously, this presents an issue if your maternity leave is unpaid and you can’t afford to continue making income-based payments during that time. Do whatever you can to save up money to make those payments during your maternity leave so that you do not have to opt for deferment or forbearance during your maternity leave.
In the off chance that you have an employer that offers more than 12 weeks of maternity leave (in other words, more than the 12 weeks under FMLA) you’ll have to choose between taking the extra time off (which stops the clock on your qualifying payments) and staying home with your new sweet babe. It’s a really unfair choice, but I’m guessing that most public service jobs that would qualify you for PSLF won’t offer you more leave than what’s under FMLA anyway. Sadly.
What you should do before and during maternity leave:
Start saving money so that you can continue making your qualifying payments during maternity leave.
Before your maternity leave starts, make sure that your employer qualifies by filling out this employer verification form. If you haven’t been doing this annually, I recommend starting now. Filling out this form creates a paper trail that you can point back to the year your loans are supposed to be forgiven.
Make sure you’ve taken care of everything with your employer for your maternity leave to begin under the FMLA.
PSLF can be tricky to navigate. If you aren’t sure about whether you qualify for PSLF, you can have my friend Travis take a look at your student loans and employer to see if you’ll qualify. Travis is THE EXPERT on student loans, and he personally analyzed mine and my husband’s student loan situation and saved us literally hundreds of thousands of dollars in the process. I can’t say enough good things about him.
As long as you keep the above steps in mind, you should be able to qualify for PSLF, even taking maternity leave once per year under FMLA.
Are you seeking PSLF and maternity leave? Have you taken maternity leave and qualified for PSLF? I’d love to hear from you–comment below!
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Hi there! I’m Amber! And welcome to the Deeply in Debt blog where we’re offering simple solutions for big debt.
Are you sure that taking more than 12 weeks of maternity leave will stop the clock on your qualifying payments?
My wife is in that situation. She is employed by the government (eligible for PSLF) and has 14 months of maternity leave. So far, she is 10 months into maternity leave and has been continuing to make qualifying payments. She can afford to make the payments because I still work.
Are vacation and leave periods considered when determining whether I am a full-time employee?
The government website says leave is counted as hours worked in determining full-time employee status as long as its a qualifying condition under FMLA. But it never specifically states that only 12 weeks qualify.
“Vacation or leave time provided by your employer is counted as hours worked in determining whether you are a full-time employee. This includes leave taken for a qualifying condition under the Family and Medical Leave Act of 1993.”
And she has spoken to several representatives from FedLoan and they assure her that it qualifies.
after 6 weeks, my wife’s maternity benefits decrease and she will only be taking home half salary for 6 more weeks, then 6 weeks of no salary.
Is it possible to re-certify her IBR rate during these later two periods? We send the loan provider a copy of her paycheck to calculate the IBR rate. If her paycheck drops by 50 (or 100%) while on leave, would the servicer use this snapshot of new income to lower the IBR payments? We would of course re-certify the following year when income returns to normal.