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I want to start a family but I still have massive student loans

Posted June 22

How can I pay off six-figure student loans while earning my PhD, living in an expensive city and trying to adopt a child? --Derion

It's tough for students to plan for the future while wrestling with student loan debt. But with careful strategy, it's not impossible.

There are a few steps you can take to help lighten the burden.

Step 1: Contact your loan provider

You can use the fact that you're still in school to your advantage. If you're at least a part-time student, you can apply for loan deferment, explains certified financial planner Bill Simonet of Simonet Financial Group.

While your loan is deferred, you won't have to make payments until you graduate. And some loans offer a six-month grace period, giving you time after graduation to get settled before your first payment is due. Loan deferment usually occurs automatically when you enroll in a degree program, but you can also apply through the Department of Education's website.

When graduation nears, you should choose a repayment plan that works for your lifestyle, says Marguerita Cheng, a certified financial planner at Blue Ocean Global Wealth. Federal student loan providers offer a variety of options, including income-based plans which cap monthly payments at 15% of your income. If your circumstances change, you can always choose a new plan.

Step 2: Tackle interest payments

Once you've deferred your loans, it can be tempting to ignore them until your payments kick in. But that could make your monthly bills higher down the line, because you could still be racking up interest before your first payment is due.

Unsubsidized loans begin accruing interest the moment you take them out. In contrast, the federal government pays off the interest on subsidized loans while you're in school, in loan deferment, or in a grace period.

To minimize the post-graduation headache, consider at least paying down the interest on unsubsidized loans while you're in school, suggests Jaime Quinones, a CFP based in New Jersey.

Quinones also suggests holding off on consolidating your loans, since it can be hard to predict where life will take you after graduation. If you consolidate now, you may not be able to apply for income-driven repayment plans or loan forgiveness later.

Still, consolidation can help if your interest rates are unbearable. This is especially true if you can "structure a 10 or 15 year pay-down schedule," explains Simonet.

Step 3: Consider working part time

A part-time job can help ease your financial burdens while you're in school. That extra income can be used to cover student loan payments, living expenses and personal goals -- or in Derion's case, adoption expenses.

Simonet suggests "Uber or Lyft, bartending, or working as a server or a graduate assistant." You could also inquire about work study programs at your university or other on-campus job opportunities.

Step 4: Look for employers that offer repayment benefits

After graduation, you could consider applying for a job that offers student loan repayment benefits. A small but growing number of employers are starting to offer the perk to attract young workers.

"Many savvy employers know the burden of student loans is real and have found that offering repayment programs is an excellent way to attract the talent they need," explains Jeffrey Sturgis, a CFP at Brightstone Advisors.

You could also apply for a job at a government agency, where you might be eligible for the Public Service Loan Forgiveness Program. This program promises to forgive any remaining student debt as long as you've been making payments on time for 10 years. But the program has come under scrutiny in recent months and could soon be going away.

Step 5: Lean on family

It can be hard to ask mom and dad for help when you're starting your own life. But family members might be willing to loan you money at a low interest rate -- or for no interest at all.

"The reward for the parent or grandparent is seeing the relief and genuine appreciation in their family member's eyes and the satisfaction of knowing they made a real difference in their life," explains Sturgis.

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