My brother is less that a year out from early retirement, and he recently found out that his adult daughter (living at home, paying utilities and her own expenses) has nearly 160K of student loans. Only child, mother is deceased.
90K in private loans @ 10% variable ( deferred)
65K in federal @6% fixed (deferred)
10K in federal that he co-signed but she pays down faithfully.
My niece works for-non profit @ 50K per year but drowning in student debt. She does put into 401K for employer match, and is using the snowball method.
My brother was planning on paying off the loan he co-signed and paying off his home before he retires. He was considering taking a cash out refinance for himself to invest and give himself a bigger cash cushion until he gets his pension at 60 ( He has most of his money in 401K ~850K, 85K cash, ~50K in brokerage, 25K in Roth IRA)
He currently owes 40K on home valued at about 400K, with no other debt.
He's considering a cash out refinance of the home to pay off the private loan,(93K) and she would just pay him.
She cannot refinance the private student without a cosigner, (which he would happily do), but then he is on the hook.
I don't normally agree to going into retirement with a mortgage, but he had budgeted for one in case he took the cash out/invest option.
He's not living in the home ( SO has her own home he contributes) and his daughter would get the home when he passes.
In her current situation she would never be able to afford a home on her own, and he wants to help her now when she needs it not as an inheritance when she doesn't and he's gone.
Aside from a bigger shovel for her, what are other options or pros/cons that he hasn't thought about. Please don't ask how he didn't know this, or why she didn't come clean sooner, but I've beat that horse to death.
They will be sitting down to go over her detailed spending, and help work out a plan of action,