As an ex-New Yorker, I know what’s it’s like to stretch your pay while dealing with high costs of living. And as someone who faced more than $100,000 in student loans at one point, I definitely know what it feels like to struggle with a massive load of debt from college.
If you’re a father (or thinking about having kids) and you also have student loans, managing the two is no easy feat. However, you can learn from those who are in your shoes. Here’s some advice from a few dads handling student loans, fatherhood, and high living expenses.
1. Combine money-saving strategies with debt repayment programs
First, look for ways to reduce your monthly payments if needed. Anyone struggling to make ends meet with their federal student loans can enroll in an income-driven repayment plan to do so. These plans won’t get you out of debt faster, but they can provide breathing room when you need it by capping monthly payments as a percentage of your income.
Danny Masters, a dentist, father, and blogger at Red Two Green, has six figures in student debt. He and his wife signed up for REPAYE (an income-driven repayment plan) to lower their monthly payments. But they’re not stopping there.
After their bills are paid, “the rest goes to making extra student loan payments. When we get bonuses like tax returns or birthday money or something like that, it usually goes directly to student loans as well.”
To help earn even more extra money, Masters relies on side gigs. In his words, “the real debt repayment comes from earning extra money each month with things we do on the side.”
Lastly, Masters uses apps to save money on household expenses.
Altogether, these strategies have helped him pay off $65,000 in debt and counting.
2. Refinance your loans if you have a stable income
Another way to boost your student loan debt repayment is to refinance your student loans at a lower interest rate.
A lower interest rate, combined with a shorter repayment term, can help you pay off debt faster. By lowering your interest rate, you lower your monthly payments and can afford to put extra funds toward your loans. This not only saves you time, but thousands of dollars in interest, too.
Of course, you don’t have to apply those savings to your student loans. If you refinance, you can shift the savings to family expenses or future expenses. Consider starting a three to six-month emergency fund, a 529 college savings account, or savings accounts for your kids.
However, before you jump into refinancing, understand that there is a downside. If you refinance federal student loans, you’ll forfeit federal benefits such as the option to apply for income-driven repayment plans, federal forbearance, deferment, or forgiveness programs.
Before you take the risk of refinancing federal student loans, make sure you have a stable and predictable job and income. As beneficial as refinancing can be, it’s still a risk.
3. Remember that money is a tool
It’s painfully easy to feel held back by money. Especially when you feel like you don’t have enough of it and you’re facing large amounts of debt.
But if you reframe your viewpoint, you might find solutions you wouldn’t have otherwise. Declan Wilson, founder of SHRPA and father with student loan debt, talks about the benefit of this:
“What really helps is understanding money is a tool that you can use to work for you. When you are finally able to come to that conclusion, everything becomes a numbers game.”
And that’s all it really is. If money is holding you back, change the lens for a minute and remember that you have the control. You’re already tackling the world’s most unpredictable job: fatherhood. If you can do that, you can do anything.