Parents: Managing the Struggles of Student Loan Repayments

College aged son and parents looking at a laptop.

The article provides guidance for parents and students on managing student loan repayments, especially focusing on Parent PLUS loan repayment and co-signed private student loans. It offers advice on discussing expectations, understanding loan terms, creating financial plans, and exploring repayment options, aiming to help both parents and students navigate the challenges of loan repayment while safeguarding their financial security.

College students can take federal student loans, but the yearly allowed amount isn’t always enough to cover costs. Parents often help by taking Parent PLUS loans or co-signing private student loans, sometimes with the understanding their student will pay back them back. But students might not be able to afford the entire load, and might not realize it until they’ve graduated.

The kicker: Parent PLUS loans belong to you. Co-signed private student loans belong to both of you. You’re on the hook if your student can’t keep up with the payments.

Hurdles can crop up like you or your college grad losing a job, unclear expectations about who’s responsible for paying, or everyone being financially overextended. But you have a much shorter time horizon to retirement than your student does. Here’s what you should both discuss about borrowing for college.

How to Manage Loan Payments Upon Graduation

If your family has already borrowed, your approach will be a little different than if your teen is still in high school because you’re already committed. Here’s what to do so payments don’t overwhelm your finances.

Discuss your expectations with your child

What was the agreement with your student when you took the loans on their behalf? Do you expect them to cover the payment or will you both pay it back together? If you didn’t discuss your expectations ahead of time, it’s critical that you do now. What can they afford? What can you afford?

Understand the loans in your name

Familiarize yourself with the terms—interest rates, repayment schedules, and available options—of any loans you cosigned or took for your child.

Help your student understand their loans

Your student also needs to understand their loans’ terms, repayment options, and schedule. They can log into their account at to learn who their servicer is. They should set up an account on the servicer’s website to avoid missing payments.

Create a financial plan

If you’ve agreed to pay parent or co-signed student loans, create a budget that includes that payment. Explore whether/how it aligns with your retirement goals and other financial priorities. Can you afford the payment?

If not, you can explore income-driven repayment plans for federal Parent PLUS loans—parents are eligible for the ICR plan—and loan forgiveness options for qualifying public service jobs. These programs may provide more manageable payment terms. Unfortunately, private loans don’t qualify.

Consult a financial advisor

If you’re feeling overwhelmed, it’s worth consulting a financial advisor or student loan counselor to explore your payment strategies.

Tips for your student:

Meanwhile your student should be taking responsibility for their loans and, if you agreed on it, the portion you borrowed for them. Here’s what students can do to stay on top of things:

  • Develop a budget mapping out all monthly expenses with student loan payments included.
  • Set up automatic payments to ensure never missing a deadline. Some private lenders may offer interest rate reductions for borrowers who enroll in automatic payment programs.
  • Regularly review loan statements and address any issues immediately.
  • Prioritize paying off high-interest college loan repayment first to minimize long-term interest costs, while making the minimum required payment on other student loans.
  • Find out if their employer offers any student loan repayment assistance or benefits. Some companies do.

If they’re financially overwhelmed:

  • Explore income-driven repayment options for federal student loans. This option won’t help with private loans or paying off parent loans, unfortunately.
  • If interest rates have decreased, consider refinancing to potentially secure a lower interest rate. But be mindful that federal loans come with protections that will be lost with refinancing to a private loan.
  • Consider supplementing income with part-time work, freelance gigs, or a side business, and putting extra money toward loan repayments.
  • Consider consulting a financial counselor or student loan expert. They can provide personalized guidance.

How to Support Your Student Without Crushing Your Own Financial Security

If you haven’t yet borrowed for college, and your kids are still young, you’re in the best place to plan. Not everyone is in a position to save, but if you’re able—even a small amount each month—it will make a difference. Set up a dedicated college savings account, such as a 529 plan, to save. These plans offer tax advantages and can help keep educational expenses separate from other financial goals.

Once your kids are in high school, it’s time to set expectations for college costs. Here’s what to discuss.

Don’t overpromise!

Talk to your child about your financial situation and what level of help you can provide. You may have more than you realize. Can you identify expenses (club sport?) that can be rerouted to college? Let your teen know they shouldn’t get attached to a certain college until the numbers are in.

Look for financial aid or merit scholarships

Not every college offers money to every student. To find financial-fit colleges, figure out if your student will qualify for need-based or merit-based aid (or a combo) before you start your search.

Pick a school you can afford

Choosing an affordable option doesn't diminish the quality of education and can be a wise financial decision. Explore the option of starting at a community college or trade school before transferring to a four-year institution. Or search for four-year schools that give good financial aid for your income.

Some debt for your student is okay. Borrowing the federal student loan limit ($27,000 for four years for dependent students) is usually fine for most students. Some guidelines say don’t borrow more than the first year’s salary.

Discuss your student’s contribution

Your teen should be prepared to contribute to their education expenses through part-time work, summer job, internships, or scholarships. Their contribution instills a sense of responsibility and reduces the financial burden on you.

Look for other cost-saving benefits

These could include state grants and scholarships for resident students; living at home and commuting; applying for private scholarships (keeping in mind that the best money comes from the colleges themselves); or using a tuition reimbursement program for working at a major employer like Amazon or Target.

If you’re struggling to pay the loans you took on behalf of your student, you may need some help evaluating your overall financial situation and payment options. We offer student loan counseling for student borrowers weighing their repayment options. We also offer credit counseling for anyone that's struggling with their month-to-month expenses and looking for ways reduce debt and make more of their money.  

Tagged in Advice for families, Loans, Student loan options

Jesse Campbell photo.

Jesse Campbell is the Content Manager at MMI, with over ten years of experience creating valuable educational materials that help families through everyday and extraordinary financial challenges.

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