Michele Findeis, a mother of four, is helping her three oldest children pay for their undergraduate degrees—in addition to repaying her own student debt. “In total, the four of us currently have $297,500 in student loan debt, and my son is only a freshman in high school,” Findeis said.

According to our parent student loan survey, many parents are in similar situations. Among parents who borrowed for a child’s college education, 55% reported that their student debt totaled $40,000 or more.

As a parent with your own student debt, your loans pose their own challenges. Your student loan payments eat into your monthly cash flow and leave less room in your budget for college costs.

Dealing with both money priorities can feel overwhelming, but learning and taking action can make a difference. Here’s a look at the reality of managing your student debt while figuring out how to help your child save or pay for college, along with some strategies for dealing with both.

How to save or pay for college when you have student debt

1. Adjust federal student loan payments

If your debt is in the form of federal student loans, you likely can adjust your payments and free up cash each month to cover educational expenses.

You could switch to an income-driven repayment plan, an Extended Repayment Plan or a Graduated Repayment Plan to make your monthly payments more manageable.

2. Refinance high-interest or private student loans

You also have the option to lower your monthly payments for private student loans, but the process is different.

Instead of changing your repayment plan, you’ll need to refinance your private student loans. That’ll give you the chance to create a new loan with new terms — and lower monthly payments.

Take a close look at refinancing both federal and private student loans that carry high- interest rates. With good credit and a higher income (usually $50,00 to $60,000 or more), you can qualify for great rates on your refinanced student loan.

Refinancing could lower your interest charges, which means more of your money could go toward paying off your student debt or finding out how to help your child pay for college.

Findeis, for example, took advantage of student loan refinancing to get a 4.00% interest rate on her debt. She also chose a longer repayment period, which helped lower her student loan payments to just $225 per month.

3. Make extra payments on your student loans

Findeis is also making $200 in extra student loan payments each month. That’s “with the intention of making my final loan payment when my son graduates from high school in June 2021, 19 years after I graduated from college,” she said.

By making those extra payments, Findeis will free up $425 per month. See if you have low-balance student loans you could knock out before your child is in college. You’ll free up the payment to increase your monthly cash flow and avoid interest charges.

4. Choose an affordable college

As a parent, you play a huge role in guiding your child to make wise college decisions, and that starts with discussing the financial realities of attending college and repaying student debt.

By encouraging your child to choose an affordable college that matches their academic and career goals, you can greatly limit both your student debt and your need to take out parent student loans.

Highlight the great value of attending an in-state public college (even better if they can live with you rent-free). You might even suggest attending a community college for the first two years, which saves students $11,377 on average.

5. Get free college funds or credits

One of the best ways to pay for college is to get someone else to do it. Parents and students should devote time and energy to finding free money for college:

  • Complete and submit a Free Application for Federal Student Aid.This is your ticket to qualifying for federal student aid such as Pell Grants and federal student loans. Many colleges also use FAFSA information to evaluate students for scholarships and other forms of assistance.
  • Find and apply for as many scholarships as possible. Many organizations, including Student Loan Hero, offer scholarships to help you pay for college.
  • Look for ways to earn free or cheap college credits. “Knowing what I know now, I am encouraging [my son] to take at least four AP classes during high school so he has one semester of credits complete before he graduates,” Findeis said. You also can look into dual-enrollment programs for your child or have them earn credits through the College-Level Examination Program.

6. Shop for the best student loans

Ultimately, there probably will be some college costs you can’t cover with cash, savings, or scholarships. As you look for additional ways to pay for college, student loans can fill the gap.

“Shop for the best interest rate!” Findeis advised. “One of my daughters took a loan as a freshman for $30,000, and the balance to repay was over $40,000 when she graduated because the interest rate is 12.125%.”

Compare all forms of student loans available to you to find the most cost-effective ways to pay for college. Borrow through the most affordable options first, which often are Direct Subsidized Loans or Direct Unsubsidized Loans with interest rates of 4.45% for the 2017-18 academic school year.

If Direct Loans won’t cover everything, start comparing federal Parent PLUS Loans to private student loans.

Also, consider cosigning a private student loan with your child or taking out private parent student loans in your name. If you’re well-qualified, you often can get rate offers that beat the costs of Parent PLUS Loans.

“Do what you can to not allow interest to accrue,” Findeis suggested. “Make interest payments while your child is in school and try to pay small loans off completely.”

Originally posted on Student Loan Hero.

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