Your Best Ways as Parents to Pay Off Student Loans, With or Without Making Payments

 November 24, 2020
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As a parent, it can be disheartening to see your children mired in student loan debt. They’ve successfully completed their degrees and are just starting out, but the financial cards are already stacked against them. More than half of parents plan to help their children repay all or some of their federal or private student loans, according to a 2019 survey from College Ave Student Loans.

You may wonder about some of the best ways for parents to pay off student loans. On one hand, you want to help and do what you can, but on the other, you have to look out for yourself and your own financial well-being, especially as you near retirement age. You’re not alone in this debate.

Luckily, there are small ways you can contribute and help your kids pay off student loans without sacrificing your own financial stability.

1. Forget the gifts — do this instead
2. Match their student loan payments
3. Help out their bottom line
4. Sign up for Upromise
5. Refer your children for gigs
6. Encourage — even cosign for — student loan refinancing
Plus: Consider ways for parents to pay off student loans

1. Forget the gifts — do this instead

Consider how much you spend each year on Christmas gifts, birthdays and other special occasions. While everyone loves gifts, many student loan borrowers probably prefer to have that money you spent go toward their student loan payments instead.

Rather than giving cash, you can typically become an authorized payer on your child’s student debt through their loan servicer. That way, you can go directly to the source and make payments.

An alternative method is to help your child with student loan payments using Gift of College gift cards.

The payment amount doesn’t have to be a lot. Let’s say you typically spend $20 on a gift. Instead of buying something your children may not need or even like, you can help them financially by putting that $20 toward their student loans.

That money could eventually lower their outstanding balance by thousands of dollars over time. You don’t have to wait until your child graduates to chip in. Parents can start making small contributions while the student is still in school. In-school loan payments can make a big dent in debt.

Ways for parents to pay off student loans: Keep taxes in mind
● If you contribute more than $15,000 to your child’s education debt in any one year in 2018 through 2021, you may need to fork over a gift tax to the IRS.
● Tuition is excluded from this provision, but student loan payments are not, as of November 2020.

2. Match their student loan payments

If you want to support your kids year-round, rather than putting money toward loans once or twice a year for holidays, consider matching your child’s student loan payments.

By matching their payments, you can motivate them to get out of debt even sooner and help make significant financial progress. You also can set up automatic payments to send money straight from your bank account to the loan servicer on a regular basis.

“If parents can afford to double down on payments with their children at least every other month, it’s extremely helpful,” said Tonya Rapley, founder of the personal finance site My Fab Finance and the Banish the Balance Challenge, which helps people get out of debt.

“By doubling down, I mean matching their payment,” Rapley said. “So instead of a $400 payment, they are making payments of $800 at least six times a year. This nudge can significantly speed up the repayment process.”

You and your child could alternate payments twice a month, as bi-weekly student loan payments can be especially impactful to cut down on interest charges.

To gauge the significance of your help, check out our student loan prepayment calculator:

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3. Help out their bottom line

Recent college graduates reported that their education debt caused them to give up traveling (44%) and going out with friends (30%), among other activities, according to our 2019 financial milestones survey.

Instead of helping out directly with student loan payments, you can contribute in other small, yet effective, ways to boost your kids’ bottom line. This frees up some cash, which they can then put toward their student loans.

Consider the following ways for parents to pay off student loans — by paying for other expenses:

  • Getting them a gift card to a grocery store
  • Helping them buy toiletries
  • Purchasing new clothes they need
  • Paying their medical bills
  • Covering regular expenses, like cellphone bills or utilities
  • Treating them to dinner and a movie

A small gesture can go a long way. Buying necessities or treating your children to an occasional night out can help them get what they need while they focus on their debt repayment. It can also help them stave off debt fatigue.

Can parents pay off student loans for their children?
● Practically, yes, any parent (or anyone) can informally make student loan payments on their borrower’s behalf. If you plan to make recurring payments, you could even ask your child’s loan servicer to become an authorized user on the account — this way, you can log in and make payments at your convenience.
● Realistically, however, paying off student loans for your son or daughter might not be in your family’s best interest. If your finances are on shaky ground — perhaps you’re behind on retirement saving goals, for instance — you could be better off encouraging your child in their repayment without opening your pocketbook. You could help them evaluate income-driven repayment (IDR) plans to keep their federal loan payments low, for example.
● Remember, there are many helpful ways for parents to pay off student loans without making payments directly (see Nos. 4, 5 and 6).

4. Sign up for Upromise

One way you can make money from your day-to-day spending and help your kids pay off student loans is through Upromise.

Owned by loan provider Sallie Mae, Upromise allows you to sign up for its free rewards program by linking your credit and/or debit card. You’ll earn cash back on various purchases, including travel, restaurants, groceries and online shopping. You can either cash out your rewards by transferring to your account or use them to pay down an eligible student loan directly.

In other words, you could earn cash back for the spending that you are going to do anyway. Signing up for Upromise is a hassle-free way to help you earn more specifically to help pay off student loans for your child.

5. Refer your children for gigs

One way you can help your kids pay off student loans without spending a dime is by referring them for career opportunities or a side hustle that will help them earn extra income.

When it comes to getting gigs, it’s often about who you know, rather than what you know. As a parent, you can mine your professional and personal contacts to help your child make connections to advance their job search. When your son or daughter picks a target job or industry, you can introduce them to people you know who could be a potential employer or a mentor.

Networking will help them learn valuable communication and interview skills. And if it leads to a job, they’ll start earning income to contribute to their outstanding loans.

Another option is for your child to develop a side hustle, which is any gig outside of a traditional day job to make extra money.

Hopefully, your kids have steady employment, but even if they don’t, having a gig on the side can be helpful. They can consider jobs like freelance writing, design services, pet sitting, house cleaning, landscaping and more. You may be able to refer your child to friends, neighbors or coworkers who need these services.

Of course, speak to your kids first before recommending them for something and make sure you are both on the same page. Once you both have an understanding of what you and they are willing to do, you can refer them to potential employers or side hustles (or both) that can help them earn more money and pay off student loans faster.

6. Encourage — even cosign for — student loan refinancing

If your college grad needs help with corralling the high interest rates or monthly payments on their private loans, student loan refinancing could be the ticket. Refinancing private and/or federal student loans with a bank, credit union or online lender also consolidates the loans into one new loan, making for a simpler repayment.

To qualify for refinancing, however, your child might need help. Refinancing companies often require borrowers to have stable income and strong credit. Without one or both, a cosigner like you could make the difference.

By cosigning a student loan refinancing application, however, you agree to put your own credit on the line. You’ll become as legally responsible for repayment as the primary borrower.

Weigh that risk — plus the fallout of refinancing federal loans — when discussing this option with your family. After all, refinancing is irreversible and, though it’s a no-brainer solution for high-interest private loans, it would strip federal loans of safeguards like IDR.

Consider ways for parents to pay off student loans

If you’re one of the many parents who plan to help their kids pay off some or all of their student loans, there are a variety of ways you can contribute from a monetary standpoint and otherwise.

Of course, you want to keep your own financial progress on track first. Using these tips, you can continue to support yourself while helping your kids pay off their student loan debt. Just be sure to never put your own financial life in jeopardy to help your children, as they still have many working years ahead of them while you need to plan for your hard-earned retirement.

Andrew Pentis and Alli Romano contributed to this report.

Interested in refinancing student loans?

Here are the top 9 lenders of 2022!
LenderVariable APREligible Degrees 
1.74% – 8.70%1Undergrad
& Graduate

Visit Splash

1.74% – 7.99%2Undergrad
& Graduate

Visit Earnest

4.44% – 8.09%3Undergrad
& Graduate

Visit CommonBond

1.74% – 7.99%4Undergrad
& Graduate

Visit SoFi

1.89% – 5.90%5Undergrad
& Graduate

Visit Laurel Road

1.74% – 7.99%6Undergrad
& Graduate

Visit NaviRefi

2.05% – 5.25%7Undergrad
& Graduate

Visit Lendkey

1.86% – 6.01%Undergrad
& Graduate

Visit Elfi

& Graduate

Visit PenFed

Check out the testimonials and our in-depth reviews!
1 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. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount

The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.

To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of May 4, 2022.

2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.

Earnest Disclosures

Student Loan Refinance Interest Rate Disclosure Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 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%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Let us know if you have any questions and feel free to reach out directly to our team.

3 Important Disclosures for CommonBond.

CommonBond Disclosures

Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. 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 0.15% effective Apr 22, 2021 and may increase after consummation.

4 Important Disclosures for SoFi.

SoFi Disclosures

Fixed rates range from 3.49% APR to 7.99% APR with a 0.25% autopay discount. Variable rates from 1.74% APR to 7.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR 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. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.

5 Important Disclosures for Laurel Road.

Laurel Road Disclosures

All credit products are subject to credit approval.

Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. 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. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit

As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.

  1. Checking your rate with Laurel Road only requires a soft credit pull, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
  2. Savings vary based on rate and term of your existing and refinanced loan(s). Refinancing to a longer term may lower your monthly payments, but may also increase the total interest paid over the life of the loan. Refinancing to a shorter term may increase your monthly payments, but may lower the total interest paid over the life of the loan. Review your loan documentation for total cost of your refinanced loan.
  3. 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. During any period of forbearance interest will continue to accrue. At the end of the forbearance period, any unpaid accrued interest will be capitalized and be added to the remaining principle amount of the loan.
  4. Automatic Payment (“AutoPay”) Discount: if the borrower chooses to make monthly payments automatically from a bank account, the interest rate will decrease by 0.25% and will increase back if the borrower stops making (or we stop accepting) monthly payments automatically from the borrower’s bank account. The 0.25% AutoPay discount will not reduce the monthly payment; instead, the discount is applied to the principal to help pay the loan down faster.

Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.

Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.

Interest Rate: A simple annual rate that is applied to an unpaid balance.

Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.


This information is current as of April 29, 2021. Information and rates are subject to change without notice.

6 Important Disclosures for Navient.

Navient Disclosures

You can choose between fixed and variable rates. Fixed interest rates are 2.99% – 8.24% APR (2.74% – 7.99% APR with Auto Pay discount). Starting variable interest rates are 1.99% APR to 8.24% APR (1.74% – 7.99% APR with Auto Pay discount). Variable rates are based on an index, the 30-day Average Secured Overnight Financing Rate (SOFR) plus a margin. Variable rates are reset monthly based on the fluctuation of the index. We do not currently offer variable rate loans in AK, CO, CT, HI, IL, KY, MA, MN, MS, NH, OH, OK, SC, TN, TX, and VA.

7 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via 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 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 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 5/17/2022 student loan refinancing rates range from 2.05% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.93% Fixed APR with AutoPay.

8 Important Disclosures for PenFed.

PenFed Disclosures

Fixed Rate Loan Terms: 5 years/60 monthly payments, 8 years/96 monthly payments, 12 years/144 monthly payments or 15 years/180 monthly payments. Annual Percentage Rate is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed rates range from 3.29% to 5.43% APR. Rates are subject to change without notice. Fixed APR: Fixed rates will not change during the term. This rate is expressed as an APR. Since there are no fees associated with this loan offer, the APR is the same percentage as the actual interest rate of the loan. These rates are 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.