THE BLOG
12/04/2015 09:44 am ET Updated Dec 06, 2017

I'm a Single Mom and Struggling With Student Loans and Childcare

Question:

Dear Steve,

I am a single mom of two and I have about 67k in student loan debt. I cannot afford to pay my student loans after trying to work two and three jobs just to take care of my children.

I don't have anyone to help me. The payments are high, even with the income based repayment plan. Do you have any recommendations or do they have any debt forgiveness options that I am not seeing? Would bankruptcy be an option? Thank you!

Jaye

Answer:

Dear Jaye,

While I might not have a magic wand but I can offer some advice that should help to lessen your load a bit.

Since you are struggling and working multiple jobs to make ends meet, I would suggest visiting Benefits.gov to see what public benefits you may be eligible for.

While working multiple jobs is an admirable demonstration of your commitment to work, I would love to be able to see you find some balance to have an opportunity to devote more time with your kids since you said you are trying to struggle through on your own. They need you too.

Public benefit programs exist to assist people who meet the criteria. The programs are there and waiting to help. You just need to apply. Based on your income this might be something like SNAP to help lessen the grocery bills a bit.

I always find it laughable that people say you can live your entire life on public benefits. Those are obviously people who have not tried to do that. Public benefit programs are their to help struggling people make life work, not replace work completely. And then there are the folks that think there are all sorts of fraud by people who use benefits, but what is the truth? See Welfare and Benefit Fraud Statistics Show a Disturbing Pattern. The answer will surprise you.

Since you are on an income based repayment program I am assuming you have federal student loans. In that case it might lower your payment if you drop a job, pick up benefits to fill that gap and the lower countable income will get you a lower payment. For all the federal student loan repayment options, see The Ultimate Guide to Dealing With Student Loans You Can't Afford.

Soon there will be another program announced called REPAYE which will lower the payment even further on income based programs. It should roll out in the near future. I would suggest you subscribe to my free newsletter to watch for information on REPAYE when it is available. Even that program has some traps people will need to watch for.

Bankruptcy is always a solution for student loans even if it does not eliminate them. Bankruptcy is the fastest and least expensive way to eliminate many types of debt and that can make more room for you to be able to afford your student loans.

The single best program at the moment to forgive your loans is the Public Service Loan Forgiveness program. Click here for details on how your loans can be eliminated in 10 years of low to no payments, tax free.

And one last tip, if you are over withholding on your taxes so you get a big refund back each year, stop doing that. Change your withholdings so you break even and not owe any taxes but don't get a refund. This will put more money in your pocket each month when you need it most to get by.



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