‘I’ve lost my son because of this.’ I cosigned student loans for my son, but he dropped out of school, and now I’m struggling with $50K in debt. What should I do?

Question: I just finished paying off my credit card. I am 56 years old and should be debt-free. My hopes and dreams for my son were solid, and I was fine cosigning on his school loans as I did the same for his sister. She is almost paid up on her loans but something happened with him, and he dropped out of school. I now have $50,000 of school loans to pay. I have arranged with Sallie Mae to pay almost $700/month on the loans, but last month my freelance billing was only $175. I’m sick thinking I will probably die with debt. It hurts worse that I’ve lost my son because of this too.I would like to retire someday, I’m hoping for a magic bullet to fix this for me. Please help. 

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Answer:  Parents are increasingly feeling the burden of debt they took on for their children: Total parent PLUS loans now top $103 billion. And a recent NerdWallet survey found more than one in three who took out a parent PLUS loan now regret it. So what can you — and other parents facing a similar issue — do?  

First up, let’s celebrate all the ways you’re on track as it is: Most likely, the credit card debt you had had a higher interest rate than the student loan debt, and kudos to you for repaying it. “That is a great accomplishment,” says Brent Weiss, certified financial planner and co-founder of Facet Wealth. But now, “we need to focus on three items: your earnings, your retirement savings and reducing the student loan debt,” says CFP and attorney Charles C. Weeks Jr.

Which do I focus more on: Retirement savings or student loan debt?

One big question many parents facing this issue might have is whether to save more for retirement or pay off the student loans faster. Depending on the interest rate on the student loans, it may not make sense to rush to pay down the debt (though always pay the minimums), if that means not saving any money for your own retirement. “If the rate on the student loans is low, it’s possible your investment return may be higher, and by rushing to pay down the debt, you’ll shortchange your retirement savings,” says Weeks. 

Should I refinance the student loans? 

In your case, it seems these loans are private and that you cosigned them with your son. In that case, there are two things to consider: look at refinancing your student loans to extend the repayment period, lock in a low interest rate and lower your monthly payment, says Weiss. “You can also refinance the loan into your son’s name only, but he would have to qualify for the loan and participate, so that may not be a viable option,” says Weiss.

How do I make the monthly student loan payments more manageable? 

“Don’t overlook contacting Sallie Mae again to renegotiate your payments if your income has changed substantially. They may allow you to pause payments, known as forbearance, or lower your monthly payment temporarily,” says Weiss. While neither deferment or forbearance on student loans will impact your credit, you still need to qualify for both and forbearance will increase the amount you owe.  Note that often the lender uses the borrower’s income, not the cosigner’s income, when renegotiating a repayment schedule, says Bryson Roof, a certified financial planner and financial adviser at Fort Pitt Capital Group. “Depending on your son’s income, the repayment terms could be very advantageous for both of you,” says Roof.

Weiss also recommends asking Sallie Mae about their cosigner release options. “Sallie Mae will have to approve the request and your son will have to qualify for the loan on his own so this isn’t a guaranteed fix. If you’re released as a co-signer, you’re no longer responsible for the loans and your son will assume full responsibility,” says Weiss.

For readers with parent PLUS loans, “contact your current loan servicer to discuss repayment options,” says Weiss. PLUS loans allow for enrollment in income-contingent repayment, which will cap payments at 20% of your income and extend the repayment period to 25 years. 

Whether the loans are federal or private, Roof, encourages having a conversation with a tax, legal or financial professional. “If the current monthly payment is too challenging for your budget, you can reach out to your loan officer and extend your repayment schedule, thus reducing your monthly payments. Having a lower monthly payment is typically more manageable when you’re living off fixed retirement income,” says Roof.

What is my son’s responsibility in all of this?

Sadly, Anna Helhoski, student loan expert at NerdWallet, points out that students who take on debt without finishing school face an even more painful ordeal than those who graduate because they are less likely to see the same higher wages as college graduates, which makes it even more difficult to repay the debt. “For parents whose children don’t finish a degree, there’s an added emotional blow to navigate, along with the burden of parent loans to repay,” says Helhoski.

Which begs the question: How do you navigate this emotionally? Shannon Abrams, a Los Angeles-based licensed marriage and family therapist, recommends writing a letter expressing your feelings about what’s going on, your desire to mend the relationship and pay off the bills together so your retirement isn’t impacted by them. “Letters are great because they give people time to think before responding which reduces reactivity,” says Abrams. 

Weeks notes that, maybe, if you talk to your son about what a new, extended repayment schedule looks like, “there is also the possibility that your son realizes these are his responsibility, and at a minimum begins to assist you in paying them off,” says Weeks.

If he wants to help, but feels like he cannot, Rebecca Safier, certified student loan counselor and higher education finance expert at Student Loan Hero, says he might also look for an employer that offers student loan assistance. “There are some companies that offer a student loan benefit, similar to a retirement savings benefit. This list of companies with student loan benefits is a good place to start.”

Lastly, prior to deciding to retire, it will be prudent to generate a financial plan that includes the student loan repayment obligations. “Your financial plan will help you determine if you need to delay retirement, maintain part-time employment during retirement or restructure your student loan repayment terms,” says Roof. 

*Questions are edited for brevity and clarity.