Author Topic: Would you pay off this student loan?  (Read 1110 times)

Us2bCool

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Would you pay off this student loan?
« on: April 30, 2018, 10:27:27 AM »
My husband recently passed away at the age of 51. The only debt we had outside our mortgage was his student loan, which has a rate of 2%, a balance of 13K and a monthly payment of $125.  We had decided not to pay it off because we preferred to invest the funds.

Now that he is passed, I am feeling like it might be better to just pay it off.

Reasons for doing so:
Since he is gone, I feel in my gut that paying off his last debt is the right thing for me.
The cash isn't an issue; his life insurance is in a taxable brokerage account so I can easily pull the money from there.
I can't write off the nominal interest anyway.

On the other hand, I can keep that money in an investment account where it will yield much more than the loan is costing.

If you were in my shoes, what would you do?

therethere

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Re: Would you pay off this student loan?
« Reply #1 on: April 30, 2018, 10:29:26 AM »
Unless anyone is cosigned on the loan, it should be discharged upon death. Don't pay it off keep the money.

MDM

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Re: Would you pay off this student loan?
« Reply #2 on: April 30, 2018, 10:38:54 AM »
Unless anyone is cosigned on the loan, it should be discharged upon death.
Maybe.  Depends on the type of loan.  See What Happens To Student Loans When You Die? for more.

Us2bCool, sorry for your loss.  Appears you have a classic case of math vs. feelings.  At 2%, you will likely do better dollar-wise by paying the minimum on the loan and keeping the balance invested.  But if it's a relatively small amount compared with your overall net worth, then whatever you do won't have a significant dollar-wise impact.  If you will be happier "doing the financially correct thing" then don't pay it off.  If you will be happier paying it off, then do so. 

Us2bCool

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Re: Would you pay off this student loan?
« Reply #3 on: April 30, 2018, 11:10:31 AM »
Oh, man...it hadn't even occurred to me that the debt could be discharged. Something to look into.

civil4life

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Re: Would you pay off this student loan?
« Reply #4 on: April 30, 2018, 11:27:28 AM »
Deepest Sympathy for your loss.

As long as the student loan is government and not private it should be able to be discharged.  Actually even parent plus loans can be discharged.  I had some federal loans in my dad's name.  He became permanently disabled.  After three years his loan was completely discharged.


honeybbq

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Re: Would you pay off this student loan?
« Reply #5 on: April 30, 2018, 12:12:10 PM »
I'm so sorry for your loss.

If I didn't have to, I wouldn't pay it.

SimpleCycle

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Re: Would you pay off this student loan?
« Reply #6 on: April 30, 2018, 01:24:46 PM »
I'm so sorry for your loss.

Like others have said, the loan might be dischargeable.  Look into that before you do anything.  But if it is yours to pay, I wouldn't hesitate to make the more emotional decision over the perfectly optimal financial decision.

patchyfacialhair

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Re: Would you pay off this student loan?
« Reply #7 on: April 30, 2018, 02:51:35 PM »
I'm so sorry for your loss.

Like others have said, the loan might be dischargeable.  Look into that before you do anything.  But if it is yours to pay, I wouldn't hesitate to make the more emotional decision over the perfectly optimal financial decision.

Agreed. You're already dealing with a ton. If it can't be discharged, then pay it off and be done with it. I'm sure you have much more positive memories of his life than a student loan.