Navigating Parental Student Loans: Strategies for Debt Relief

With college tuition costs on the rise, many parents find themselves unable to save enough before their child starts college. When university payment plans aren’t sufficient, parents often turn to parent loans.

These loans put the debt in the parent’s name, making them responsible for repayment. The loan terms are usually clear from the beginning, which can work well if everything goes smoothly. However, if parents face changes in their financial situation, especially while trying to save for retirement, there are several ways to manage their finances effectively.

### How to Handle Student Loans as a Financially Struggling Parent

1. **Refinance for Better Terms**: Consider taking out a new loan with more favorable terms. If your parent loan allows early repayment before interest accrues, aim to pay it off as quickly as possible.

2. **Treat Loan Payments Like Any Other Bill**: Make more than one payment per month or pay more than the minimum due each month. Designate extra payments towards the principal to reduce long-term interest. Set up autopay to ensure timely payments and avoid late fees.

3. **Increase Your Income**: Take on a side gig or additional work hours specifically to pay down your loan.

4. **Prioritize High-Interest Debt**: View your education loan as part of your total debt. Focus on paying off the highest interest rate debt each month to reduce your overall monthly payments. Once the high-interest debt is cleared, apply the extra funds to other debts.

5. **Save for Retirement**: Contribute to an IRA or participate in your employer’s 401(k) plan, especially if there’s a matching contribution. Even a small amount can grow significantly over time, and balancing your future financial needs with current debt repayment is crucial.