Raising a family comes with a variety of challenges and can put a financial strain on any budget. Throw in college loans to repay, and anyone with dependents can start to struggle.
If you already have a family and are still paying off your student loans, you know this reality all too well. It can feel overwhelming to balance both a responsibility as a parent and an obligation to repay debt.
But it’s not an impossible task. Take a step back and a deep breath, then dive in below. Get actionable ideas on how you can make the most of your finances to take care of your family and your student loans.
Create a plan (and a budget)
The first step to make the most of your finances? Make sure you’re tracking everything and ensure that the way you use your money lines up with your priorities.
If you haven’t already, track your spending and establish a budget. Prioritize your cash flow around your fixed necessary expenses, like housing costs, bills, child care, and student loan payments.
Then, fill in your required-but-flexible expenses. These are line items like groceries and transportation. You need to purchase them, but you have some control over how much you spend.
Understand that discretionary spending, like travel, vacations, shopping, and entertainment may not have a place in your budget right now. That’s what it means to line up your spending with your priorities.
Your family always comes first, of course. You want to make sure you meet the needs of the people that depend on you. But your student loan repayment should be next on the priority list.
As long as you hold on to that debt, a chunk of your cash flow goes toward a monthly payment. You’re tied to your loans and that can limit what other financial goals you can reach.
If you can prioritize paying off your loans, you’ll fast-track yourself and your family to more financial freedom. That’s worth cutting some of the “wants” out of your budget for a little while.
You need to get strategic with the way you pay off student loans, too. Here are a few ways you can get organized and maximize your efforts:
- Utilize the debt snowball or debt avalanche methods
- Make more than the minimum payments, or pay more than once a month
- Pay back student loans in ways that save you money over time
Choose the right repayment plan and tax strategy
If you have federal student loans, choosing the right repayment plan can make a big difference.
“Income-driven repayment plans can be helpful in that borrowers can make payments based on their income and family size,” explains Adam Minsky, a student loan lawyer in Boston.
“But the plans do not take into account monthly expenses, which (when you’ve got a family to care for and every penny counts) can make even the most generous income-driven plans difficult to afford.”
This is why plans like REPAYE might not work for your family. This plan bases your payment off your and your spouse’s income, regardless of how you actually file your tax return.
Look at other options that allow you to strategically file your taxes. If you and your spouse file individually, plans like IBR base your payment on your income alone.
That could make student loans more manageable since your monthly payment could be lower.
Take advantage of your tax situation
In addition to filing the right way to maximize your repayment plan, make sure you take advantage of tax credits or deductions. See if you qualify for the following tax breaks for families:
- Dependent exemption: You can claim one exemption per person you claim as a dependent on your taxes.
- Child tax credit: This credit allows you to reduce your taxable income by up to $1,000 per child under the age of 17.
Talk with your loan servicer
Regardless of whether you have federal student loans or private, talk to your loan servicer if you struggle to make payments. Your servicer can work with you to provide resources or look at repayment plan options.
You may get to change up your payment schedule or monthly payment amount. Your servicer can explain courses of action for drastic situations, too, including forbearance.
“You may turn to forbearance as a last resort,” says Minsky. “That can postpone payments and avert default.”
Minsky stresses that this shouldn’t be your first choice, but it is an option. The downside, he explains, is that forbearance leads to major balance increases due to ongoing interest accrual.
Find flexible ways to earn more
There’s only so much money you can save, especially when you have other mouths to feed. Caring for your family is a top priority, but the expenses add up and there’s not always a lot of extra financial fat to trim.
One of the most powerful ways to improve your financial life is to earn more money. Amy Beardsley was a single mom when she went through school, and says she took out student loans to help pay for the costs of raising a child.
“My student loans had to pay for daycare for my little one, Christmas presents, diapers; all that jazz,” Beardsley explains. “When I got out of school, I actually got a decent job in my field. But I still had to use credit cards because a lot of my money went to student loans.”
Caring for her family while continuing to pay off student loans is a challenge. She works to overcome it by running an online business.
“I started a freelance writing business early this year to help earn extra and that’s helping,” Beardsley says. “It is tough working that in addition to full-time work,” she admits, “but it’s doable.”
Prioritize and focus on your goals
Beardsley says she’s also a huge Dave Ramsey fan. She and her family use his advice to create and keep to a strict budget. “A budget is the only way to go,” she advises, and notes that it does require sacrifices to make it all work.
Her family doesn’t go out to eat often and keeps a low grocery budget by sticking to simple means. They try to find entertainment options that are free or extremely low-cost.
But these frugal habits are “totally worth it,” she says. “We just decided one day that it was enough. We cut up all our cards and now if we can’t pay cash, it doesn’t happen.”
That dedication to her financial goals has resulted in paying off $24,000 in credit card debt. But it hasn’t been all work and no play.
“Every time we pay off a debt we do something to celebrate,” says Beardsley. “We go out to a movie or a restaurant, or we buy something we’ve saved up for.”
Interested in refinancing student loans?Here are the top 7 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
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: https://www.earnest.com/eligibility. 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 3.45% APR (with Auto Pay) to 6.99% APR (with Auto Pay). Variable rate loan rates range from 1.81% APR (with Auto Pay) to 6.49% 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 November 6, 2019, 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 11/06/2019. 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 https://www.earnest.com/terms-of-service, email us at email@example.com, 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.
3 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.
ANNUAL PERCENTAGE RATE (“APR”)
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.
ELIGIBILITY & ELIGIBLE 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 https://www.laurelroad.com/refinance-student-loans/refinance-parent-plus-loans/ 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.
POSTPONING OR REDUCING PAYMENTS
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.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of November 8, 2019 and is subject to change.
4 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.
5 Important Disclosures for CommonBond.
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 1.9299999999999997% effective October 10, 2019.
6 Important Disclosures for LendKey.
Refinancing via LendKey.com 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 LendKey.com. 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 LendKey.com 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 11/07/2019 student loan refinancing rates range from 1.90% to 8.65% Variable APR with AutoPay and 3.49% to 7.75% Fixed APR with AutoPay.
7 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 09/23/2019. Variable interest rates may increase after consummation.
|1.81% – 6.49%1||Undergrad & Graduate|
|1.81% – 7.36%2||Undergrad & Graduate|
|1.99% – 6.65%3||Undergrad & Graduate|
|2.43% – 7.60%4||Undergrad & Graduate|
|2.02% – 6.30%5||Undergrad & Graduate|
|1.90% – 8.65%6||Undergrad & Graduate|
|2.74% – 6.24%7||Undergrad & Graduate|