- The number of older Americans with student loans has quadrupled in the last decade.
- Many financial advisers say going into debt to pay for education is a mistake.
- If you already have loan debt, use these tips to help you stay on top of repayment.
Did you take out a bunch of loans to help junior go to college?
The number of older Americans with student debt has quadrupled in the last decade, and those over age 60 are on the hook for more than $66 billion. Many financial advisers say going into debt to pay for education is one of the worst mistakes you can make.
If you already owe a bunch of money, you can take steps to make it more manageable.
If you're having difficulty keeping up with the payments, pick up the phone and call your lender. Explain your situation and see if you can renegotiate the terms to lower the monthly bill. It may mean spreading out your payments over a longer period. Or even better: Get the lender to agree to reduce the amount owed.
Using the equity or value you've built up in your home to pay down a high interest rate student loan is another option. This plan works best if you're not planning to move in the near future. However, it comes with a big risk: If you can't keep up with the payments you may end up losing your house.
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Did you co-sign a loan? Guess what, you're 100 percent responsible for repayment. If your child stops paying, lenders can, and will, come after you. Sit down with your child and go over all the loans they've taken out to get a full picture of where you both stand.
For loans solely in their names, help them apply for income-driven repayment plans for their federal loans where monthly payments are capped at 10 percent to 15 percent of their discretionary income. Or see if they can refinance private loans through a company like SoFi or Credible.
Getting this debt under control should make paying the bills a little easier and help you to Retire Well.