How to Handle Student Loans When You’re a Stay-At-Home Mom

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Many parents long to be home with their kids rather than working. In fact, a majority of working mothers (54 percent) say they’d prefer the role of stay-at-home mom, according to a Gallup Poll.

Parents with student loan debt often feel like being a stay-at-home mom isn’t an option. However, being a stay-at-home parent is primarily a lifestyle choice, not a financial one. If your student loan payments are the biggest obstacle standing between you and your goal of staying at home with the kids, it’s time to take a second look at your finances.

The winning strategy for managing student loans as a stay-at-home mom is pretty simple: find solutions for student debt, decrease your costs, and look for additional income.

3 ways to manage student loans as a stay-at-home mom

With some smart student loan management, being a stay-at-home mom or dad is more doable than you think.

“Student loans are like any other fixed expense in that you have to repay them or risk your credit score,” said Brett Graff, The Home Economist and author of “Not Buying It: Stop Overspending and Start Raising Happier, Healthier, More Successful Kids.” Like most fixed expenses, you can budget and plan for student loan payments.

Student debt is hard to escape, and the surest way to do so is to pay it off. But just because you have to repay your student loans doesn’t mean you’re stuck with a standard 10-year repayment plan. In fact, there are a few ways you can reduce your monthly student loan payments to create more room in your budget.

1. Refinance student loans

Refinancing student debt helped periodontist and dad Eugene Gamble pay more, even with his wife staying at home with the kids. “I looked into ways of reducing the interest accrued by moving money to lower interest-bearing loans,” he said. He even took advantage of a 0% introductory rate on a credit card.

The easiest and most permanent way to lower interest rates on student debt is through refinancing. Refinancing student loans is most beneficial when you start with higher student loans rates around 6.00% or more — such as with Grad PLUS loans. That’s the interest rate level at which refinancing starts delivering savings.

Refinancing can also help you reset your student loan repayment to a longer period. By stretching repayment of your remaining student loans over a longer period, you lower what you have to pay each month but increase the amount of interest paid over the life of the loan. Try using the calculator below to see how refinancing your student loans could result in a lower monthly payment.

Student Loan Refinancing Calculator

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Note that federal student loans have unique protections and payment plans for borrowers that can help manage costs. If you refinance student loans, you will lose these federal student loan benefits. Even so, refinancing student loans can lower your monthly payments and get closer to your goal of stay-at-home parenthood.

2. Switch to an income-driven repayment plan

Another way to reset your student loan payment is through income-driven repayment (IDR) plans on federal student loans. By enrolling in these programs, your monthly student loan payments can be lowered to what’s affordable for your income, cost of living, and family size.

If your household income drops because you choose to step away from work, you can apply for an income-driven repayment plan. You’ll have to certify your income one of two ways:

  • Certify your new household income without your full-time income.
  • Certify just your income as a stay-at-home parent.

Enrolling with your new household income could drop your student loan payments significantly.

Certain IDR plans, like Income-Based Repayment (IBR) and Pay As You Earn (PAYE) allow you to set payments to match your personal, rather than household, income. If you make $0 as a stay-at-home mom, your student loan payments will be matched to this income — at $0. It’s important to note that to do so, you must file your tax return as married filing separately.

You should be aware that if you choose an IDR plan, your student loans will continue to accrue interest. It’s possible that your student balances could accrue more interest than you pay each month, and would grow. However, these plans also offer forgiveness of remaining balances after 20-25 years of payments. You can use this calculator to see how the IBR plan could affect your student debt.

3. Choose another repayment plan

In addition to IDR plans, borrowers with federal student loans can switch to other repayment plans:

  • The Graduated Repayment Plan starts with lower payments at first, then increases them every two years.
  • Extended Repayment Plan can stretch payments out across a period of up to 25 years, to keep costs manageable.
  • Federal loan consolidation will combine your federal student loans into one with a weighted average interest rate. You’ll also have the chance to choose a longer repayment period to lower monthly payments.

Compare these repayment plans with other student loan options and your projected stay-at-home budget. With some work, you can identify the option that will make student loans affordable — even on a single income.

Decrease living expenses to stay at home

If you are a stay-at-home mom or hoping to be one, another key part of the equation are your living costs. The answer to “Can I afford to be a stay-at-home parent?” comes down to whether you can pay for all your living expenses on just your spouse’s income.

“If one income can cover [fixed] expenses, plus your variable costs — entertainment, groceries, savings, retirement, and those expenses you can cut — then you can afford to stay home,” Graff says.

But you shouldn’t just assume your current level of spending will remain the same when you’re a stay-at-home parent. The lifestyle changes of becoming a stay-at-home mom are significant and will result in a lot of adjustments in your budget.

For instance, you can skip childcare costs — a huge part of any working parents’ budgets. You also might eat out less, require a cheaper wardrobe, and have more time for money-saving and do-it-yourself activities like cooking at home.

You can take this further by really cutting into your costs. Terri Huggins, a freelance writer with a nine-month-old who is “aggressively attacking student loan debt,” said she’s doing so by living cheap and budgeting.

“Last month we put an extra $500 towards debt by living modestly and [managing] expenses,” Huggins said. Her efforts include making her own baby food, breastfeeding instead of formula feeding, and using coupons and cash back apps and websites. “Though it can be challenging paying off debt while taking care of our child, we make it work.”

3 ways to increase take-home pay

On the other end of the equation is your income. When you’re switching to being a single-income household, every dollar of take-home pay counts. And if you’re looking for ways to make your budget work, even with student loan payments, start with maximizing your spouse’s paychecks.

1. Adjust tax withholdings

The great news is that by switching to one income, you greatly lower your tax liability. Take the example of a couple with each spouse earning $60,000. An analysis from the podcast Radical Personal Finance shows that if one parent stops working, the tax liability drops from over $22,000 to just $6,346.

This means that your spouse can increase his take-home pay by $390 a month, just by paying fewer taxes thanks to a lower household income. For many families, that $390 a month will more than cover student loan payments.

Just make sure the working spouse adjusts W-2 withholdings, so you’ll see these extra funds in your budget.

2. Downgrade employee-financed work benefits

Another option to increase take-home pay is to downgrade benefits for which the working spouse partially or fully pays. You might be able to switch to a health insurance plan with lower premiums, downshift retirement contributions or stop contributing to a flexible spending account (FSA) for childcare.

You will miss out on some benefits with a downgraded plan, but weigh this against your goal to stay at home and decide what you’re willing to sacrifice.

3. Find additional sources of income

While it helps to increase the working parent’s income, the stay-at-home parent can also chip in here and there to help cover student loan payments. Ideally, these earning opportunities would allow the stay-at-home parent to work from home on a part-time schedule. Babysitting, pet-sitting or managing properties are all ways you can earn a bit extra as a stay-at-home parent.

It’s even possible to continue your full-time work as a part-time employee. After I had my first daughter, I switched to flexible work arrangement where I worked from home part-time. Between nap times and switching off child care with my husband, I could fit in about three to four hours of work each day. And it made a huge difference in our finances.

If such an arrangement isn’t possible, you could consider becoming a freelancer. If you love fitness, for example, you could sell customized health and exercise plans. Whatever you love to do, look for ways to turn that passion into an income source.

Interested in refinancing student loans?

Here are the top 6 lenders of 2018!
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1 Important Disclosures for Earnest.

Earnest Disclosures

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 3.89% APR (with Auto Pay) to 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.30% 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 Month/Day/Year, 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 08/21/18. 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 hello@earnest.com, or call 888-601-2801 for more information on ourstudent 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 Laurel Road.

Laurel Road Disclosures

APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.

Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.

However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.


3 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance: Fixed rates from 3.899% APR to 7.979% APR (with AutoPay). Variable rates from 2.470% APR to 6.990% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.470% APR assumes current 1 month LIBOR rate of 2.30% plus 0.91% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score.
  2. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

4 Important Disclosures for LendKey.

LendKey Disclosures

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.


5 Important Disclosures for CommonBond.

CommonBond Disclosures

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 2.28% effective October 10, 2018.


6 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Education Refinance Loan Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of November 1, 2018, the one-month LIBOR rate is 2.29%. Variable interest rates range from 2.79%-8.39% (2.79%-8.39% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a cosigner. Fixed interest rates range from 3.75%-8.69% (3.75%-8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
  2. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision at http://www.citizensbank.com/EdRefinance, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
  3. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled. Applicants with an Associate’s degree or with no degree must have made at least 12 qualifying payments after leaving school. Qualifying payments are the most recent on time and consecutive payments of principal and interest on the loans being refinanced. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a cosigner who is a U.S. citizen or permanent resident. The cosigner (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a cosigner will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned.
  4. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  5. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
  6. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply.

2.47% – 6.99%3Undergrad
& Graduate

Visit SoFi

2.47% – 6.30%1Undergrad
& Graduate

Visit Earnest

2.51% – 8.09%4Undergrad
& Graduate

Visit Lendkey

3.02% – 6.44%2Undergrad
& Graduate

Visit Laurel Road

2.69% – 7.21%5Undergrad
& Graduate

Visit CommonBond

2.79% – 8.39%6Undergrad
& Graduate

Visit Citizens

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.