College debt is a huge burden on so many people.
Let’s take your questions one at a time.
First, it seems like you’re talking about some loans for your children, some for your wife and some for you.
On loans that were used for your kids’ educations, you should discuss with them if the repayment is significantly impacting your retirement, said Evan Drury, a chartered financial consultant with U.S. Financial Services in Fairfield.
“We all want to give our children everything, but we should give what is reasonable and know that there are other solutions to help your children beyond paying for everything out right,” he said. “For example, you could assist with monthly payments in a way that does not significantly impact your retirement. Remember your children have their entire lives to pay off their loans while you cannot obtain a loan to retire.”
Regardless of who’s name is on the loans, there are a number of factors that could allow a loan to grow over time even if you never missed a payment.
That includes income-driven repayments, Drury said:
“This pertains to federal income-driven plans which allow borrowers to make payments based upon what they can afford rather than what they owe,” he said. “The monthly interest on the loan may be higher than the monthly payment. In this case, the total student loan balance could actually increase each month.”
If you’ve ever opted for a deferment or forbearance with regards to your loan, even though you didn’t have to make a payment, the interest is still growing, he said.
“Sometimes, private lenders allow borrowers to have a temporary reduction in the amount they are expected to pay each month,” he said. “While it might help the borrower in the short-term the interest usually continues to grow.”
You should review your statements and see when and how the balance grew.
