I agree that a$78 payment a month is small beans for a two income household with $1300 disposable income. But does the small beans argument cut the other way? It would be so easy for him to get rid of the loan, why not do that first and then concentrate on the bigger loan. Mathematically, yes, it's better to go after the high interest rate loan first, but there is something to be said for dispatching with one payment. Besides, at $78 a month that 401K loan will be small beans for years.
Perhaps I'm just engaging in a bit of post hoc rationalization. I had one 3K loan at 5% that I paid off. Now I'm tackling a 15K student loan at 7.5%, which I figure will take about a year to 15 months. Anyway, I did the small loan first. The important thing is just to pick one loan and DO IT! As long as you get there, the fact that another route is a few steps shorter doesn't matter.
You're in good shape and best of luck.