How to Ask Parents for Money for Student Loans Without Ruining Your Relationship

 January 9, 2020
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There are times when your financial situation may be especially difficult, and making that monthly student loan payment feels harder than ever. But you don’t want to fall behind on your repayment plan. When you find yourself struggling financially, you might ask your parents for money for student loans.

Of course, asking parents for money can be difficult and awkward. However, getting help from mom and dad may also be a good financial move. Here’s what to consider before you do — specifically:

What is your parents’ financial situation?
Having the talk — how to ask your parents for help
Pros and cons of asking your parents for student loan help
Other student loan options to consider

What is your parents’ financial situation?

Before asking your parents for a gift or loan to help you make student loan payments, you should first consider their financial situation. Are they in a strong place? Or are they having any money struggles of which you are aware? You should probably avoid asking your parents for financial help if:

  • Your parents have their own heavy debt load, which might include paying off a parent PLUS loan they took out to help fund your education while you were still in school.
  • Your parents’ income is lower than yours.
  • Your parents are behind on saving for their retirement. Some financial experts suggest parents should fund their own retirement first before saving for their children’s college expenses. If your parents are still struggling in the retirement realm, now may not be the time to ask them for money.

Of course, you may not be privy to these details of your parents’ finances. Many people don’t like to talk about money, and parents especially may not choose to share their financial struggles with their adult children. If you don’t know what’s going on with your parents’ financial situation, you may want to directly (and gently) talk to them about it before you even consider asking for financial help.

Again, money can be a touchy topic, so pursuing this information may be awkward. It may be even more awkward, however, to simply ask your parents for money before having at least some understanding of what they can and cannot do for you.

You should also consider each parent separately if they are no longer together. Perhaps one parent is in a better financial place than the other. You may also only have one parent in your life, or you may have been brought up by other relatives who are like parents to you. This advice can be applied broadly to everyone, so consider your unique family situation.

Having the talk — how to ask your parents for money

If you know your parents are able and willing to help, how should you broach the conversation?

First, pick a good time to talk to them about your situation. Wait until there is time to sit down and discuss the matter in detail, without any distractions. Particularly hectic times, such as a holiday gathering, may not be ideal.

If at all possible, strive to have the conversation in person rather than on the phone or over video chat. Be honest with them about your current struggles, discuss your longer-term financial plans and ask if there’s any way they can help. Explain that you want to stay on the path to paying back your loans within a specific timeline. This will help assure them you aren’t just asking for money without a plan in mind, and that you’re trying to be financially responsible.

You should have some specific plans in mind for how they can help you, rather than just asking for money. Here are some suggestions you can make:

  • Your parents agree to cover a one-time payment, which they can forgive or you can pay back. This is an option if you are just having difficulties for one specific month, and are not looking for longer-term help.
  • Your parents can help you with a portion of your student loans each month, either as a gift or as a loan you will repay.
  • Your parents can give you a lump-sum no-interest (or low-interest) loan to pay off your student loans, and you can pay them back in monthly installments, just as you would your lender. This could potentially benefit both you and them, particularly if you can pay them more interest than they might get from a high-yield savings account.
  • Your parents can provide you with a gift you can use to either pay a portion of your student loan or to completely pay off your loan, depending on what you currently owe. The IRS allows for a $15,000 annual gift tax exclusion per person, meaning no tax is owed on that amount given annually to as many people as they wish. If both your parents are in the picture, they can each provide $15,000 to you on an annual basis, meaning you can accept $30,000 as a total gift per year from your mom and dad.

You should also consider the logistics of receiving financial help from your parents. Will they give you a check directly or will they make authorized payments through your loan servicer? The latter option may be best to assure them that the money is being used for student loans and nothing else.

If your parents have a financial advisor with whom they work regularly, it may make sense for all of you to have a family meeting during which the advisor can act as a neutral party to help craft a viable plan. It’s crucial to come up with a repayment strategy you will honor, just as you would with any other lender.

Of course, even if you do everything right, when it comes to asking your parents for financial help, they may still say no. If they do, don’t harbor ill feelings or try to get them to change their minds. This may only cause tension, and could damage your relationship.

There are plenty of other options you can consider if you’re having trouble paying back your student loans, which we’ll discuss at the end of this article.

Pros and cons of asking your parents for money for student loans

Before asking for or accepting student loan help from your parents, consider the pros and cons.

Pros:

  • With your parents’ help, you could end up paying less toward your loan, particularly by saving on interest.
  • You could then free up some money to pay bills or save for other financial goals.
  • You could shorten your repayment time and get out of debt sooner.

Cons:

  • Owing money to your parents could cause a strain on the relationship.
  • You may put your parents in a difficult place financially — some parents want to help and may say yes even if it’s not in their best interest. Do your best to ensure they can really afford to provide help before you even ask.
  • While extra help can inspire you to get out of debt, thinking you always have a fallback option could make you complacent about staying on track with your financial goals. Be aware of this, and make the effort to ensure that you don’t get lazy.

Other student loan options to consider

Asking your parents for money is one option if you are having trouble paying back your student loans. However, it’s far from the only one. There are many benefits to student loans, one of them being the flexibility they allow for repayment if you’re struggling financially.

For example, you can take advantage of a deferment or forbearance on federal loans. This means, in times of financial hardship, you can temporarily stop making student loan payments. There are also student loan forgiveness and income-driven repayment programs you may be able to participate in.

Check out our deferment, income-based repayment and Public Service Loan Forgiveness calculators to further explore these options.

Rebecca Stropoli contributed to this report.