Student Loans — how to repay?
Hi Terry,
I have student loans for 2 children (both now out of college). I have been paying on my daughters for 2 years & has been on forbearance since May. My (New grad in May) son’s loans never started .
What is the best way to combine or at least lower the interest rate/Payment?
Terry Says
There is a possibility that a new administration might forgive a portion of those loans (see my recent column)
But in the meantime you must deal with them as they exist — and there are a lot of differences, depending on the loan.
Part depends on how much you can afford, and part depends on what lessons you want to teach your children. And part depends on the type of loan.
If you are employed, and have home equity, and can afford it–you could refi at rates below 3% and pay off those loans. From a strictly financial point of view that is the least expensive way to deal with the loans.
If they are FEDERAL student loans, each child should look into “income-based” repayment or deferment options. That puts the responsibility squarely on them. Or perhaps you could pay every other month or somehow share in those payments. But it will take a LONG time.
If they took out private student loans, you could go to Sofi.com or Credible.com and look into refinancing them as a co-signer for your kids. But do NOT consolidate Federal Student loans with private loans in the process. You should keep those separate and deal with them separately.
