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View Full Version : Wife has 90k student loan


LoneStarM1A
07-26-2016, 06:29 AM
Quick question,

I just got married and my wife has a $90,000 dollar student loan and the interest rate is about 6%. I have about $700,000 in stocks and cash, about $250,000 of which is in 401k/IRA's, the rest mostly in stocks with about $100k cash.

Should I just bite the bullet and pay off her student loans now in one swoop? Is there any tax benefit? I'm making about $150k/year now if it matters. My wife does not work.

Thanks.


Yeffro
07-26-2016, 07:47 AM
I would pay it off today. I'm no pro, but I would imagine any small tax incentive due to paying student loan interest would be FAR outweighed by having a $90,000 lbs. weight bogging your financial situation down. I do take a rather simplistic approach to personal finance, however. I wouldn't want a 90k student loan debt anywhere near my family.

Congrats on the marriage!

MartinBishop
07-26-2016, 09:37 AM
Consult a tax advisory, pulling money out of that account may be hit with a penalty depending on how it is set up.


badflaps
07-26-2016, 10:08 AM
I'd hang loose for a little while, see how things work out.

kevbo
07-26-2016, 08:10 PM
I would make her get a job.

Rama
07-26-2016, 08:17 PM
Call the Dave Ramsey radio show. Listen to him on occasion, he seems to specialise in debt reduction/money management.

Winston
07-26-2016, 09:34 PM
I was in a similar situation about a decade ago, but reversed: I had $40k student loan debt, my new bride had the cash. At the time the loan charged 10.25% which sounds excessive, but her money was parked in a 12-month CD paying 6.5% (I really miss those days...).

Simple math said we were losing money by holding onto the cash, especially if you make anything close to six figures when the student loan deduction starts to decrease.

Can you make more money investing than you would save by paying off the debt? If you think not, settle it and never look back.

GoAroundFlaps
07-26-2016, 10:13 PM
I'd hang loose for a little while, see how things work out.


THIS^^^^^^^^^^^^^^^

Otterbox
07-26-2016, 11:53 PM
Quick question,

I just got married and my wife has a $90,000 dollar student loan and the interest rate is about 6%. I have about $700,000 in stocks and cash, about $250,000 of which is in 401k/IRA's, the rest mostly in stocks with about $100k cash.

Should I just bite the bullet and pay off her student loans now in one swoop? Is there any tax benefit? I'm making about $150k/year now if it matters. My wife does not work.

Thanks.

She doesn't work? What'd she get a degree for?

If you're newly married I'd wait at least 5 years before you pay off her loans. Have her work to pay off the interest once the deferment runs out. After the 5 year point it can be either an anniversary gift or part of a divorce settlement where she takes half of your nest egg. Hopefully it's the former...

LoneStarM1A
07-27-2016, 04:35 AM
She doesn't work? What'd she get a degree for?

If you're newly married I'd wait at least 5 years before you pay off her loans. Have her work to pay off the interest once the deferment runs out. After the 5 year point it can be either an anniversary gift or part of a divorce settlement where she takes half of your nest egg. Hopefully it's the former...

She got a bachelor's and master's in psychology. She worked for a tech company awhile but the best she could do was about 25k/year doing crappy contract work that still required long hours and lots of work at home after the 9-5 office day ended. They reneged on promises to hire her full time after being contract for a year (wanted her just to keep being a contractor with no benefits forever) so she quit, with my encouragement.

She knows she made a mistake with her education and says she got bad advice from advisers. Also she listened to everyone who said that education was the way out of poverty.

I'm doing okay in the markets lately like most people but long term I doubt I'd be able to out-earn the 6% interest rate on the loans.

Thanks for the advice so far.

UAL T38 Phlyer
07-27-2016, 04:56 AM
....has she thought abought being an airline pilot?

;)

MartinBishop
07-27-2016, 07:35 AM
Call the Dave Ramsey radio show. Listen to him on occasion, he seems to specialise in debt reduction/money management.

https://www.youtube.com/user/DaveRamseyShow

Yoda2
07-27-2016, 07:41 AM
A spouse with heavy debt or a poor credit rating can also negatively impact your credit score as well, something else to consider... Additionally, a friend with a new wife encountered a similar situation as yours. He paid off her substantial debt, and she hasn't been seen since... The joke about seeing each other's credit report before marriage, even serious dating, is no joke. Then there is the old saying "First time for love, second time for money, do it right the first time..."

WesternSkies
07-27-2016, 08:23 AM
She doesn't work? What'd she get a degree for?



An MRS degree.


Her debt and credit will hurt ya, on the other side of the spectrum my wife had zero debt so zero credit, so that also hurt us. It's a tight rope.

GoAroundFlaps
07-27-2016, 08:57 AM
Had a friend pay off his wife's med school, she bailed about a month after the last check cleared.

TankerDriver
07-28-2016, 02:50 AM
Had a friend pay off his wife's med school, she bailed about a month after the last check cleared.
I love how this tactic has become acceptable in this country's legal system.

Sent from my SM-G935V using Tapatalk

Iron Maiden
07-28-2016, 06:13 AM
Had a friend pay off his wife's med school, she bailed about a month after the last check cleared.


http://i1052.photobucket.com/albums/s456/mmouseAV8R/image_zpsvkaif8rn.jpeg (http://s1052.photobucket.com/user/mmouseAV8R/media/image_zpsvkaif8rn.jpeg.html)

UAL T38 Phlyer
07-28-2016, 07:38 AM
^^^While slightly crass, there's some bitter truth there, too.

While men are decried and reviled as being "not in touch with their feelings," it has not escaped my notice that I only know two men who left their wives.

But I know at least 30 women who left their husbands.

Which gender is the real "hopeless romantic?" :confused:

jet267
09-16-2016, 11:31 AM
Definitely makes sense to wait in my opinion also. Do not assume someone else's debt just because you married them.

Cargo Man
09-16-2016, 12:10 PM
Over 40% of first time marriages end in divorce within 8 years, over 70% of the time filed by women.

Name User
09-16-2016, 07:21 PM
Over 40% of first time marriages end in divorce within 8 years, over 70% of the time filed by women.

While the stat may be true, most likely it's the man that pushed them into it.

10 Surprising Reasons Women Turn To Divorce | Cindy Holbrook | YourTango (http://www.yourtango.com/experts/cindy-holbrook/top-10-reasons-why-women-divorce)

http://www.marriagebuilders.com/graphic/mbi8111_leave.html

Second link is a good read. Assuming you didn't marry a gold digger. :). We can all learn something.

155mm
09-18-2016, 09:34 AM
Quick question,

Should I just bite the bullet and pay off her student loans now in one swoop?

Thanks.

Quick answer: Yup! I would also encourage her to go back to school and finish the PhD or study something that interests her. I supported my wife in her educational pursuits and now we have 3 kids. I sleep better looking at it as an insurance policy in case I keel over she'll have a skill set to support the family.

1wife2airlines
09-19-2016, 09:53 PM
Did not do any numbers but investigate the income based repayment plan and hope that they change the IRS loan forebearance as income in the 20th year.
As an aside, no one told you to find a women you hate and buy her a house instead of getting married?

mike734
09-27-2016, 02:42 PM
The cash is not earning anything but the loan is costing you 6%. If you're worried about having a cash reserve for a rainy day, get a HELOC.

Pay off the loan unless you think investing the 100K will net you more than 6% (in rough terms). There's no point in paying the interest on the loan if you don't have to.

742Dash
09-27-2016, 04:52 PM
Quick answer: Yup! I would also encourage her to go back to school and finish the PhD or study something that interests her. I supported my wife in her educational pursuits and now we have 3 kids. I sleep better looking at it as an insurance policy in case I keel over she'll have a skill set to support the family.

IMO this is the best advice on this thread. Show some trust and pay off her loans without making an issue out of it.

On the other hand, telling her that you are not going pay off her loans until you "see how it goes" will plant the seeds for a failed marriage.

leica typ240
09-30-2016, 03:18 AM
I would pay it off today.


Please, DONT do this!!!

I'd hang loose for a little while, see how things work out.

Please, DO this!!!



She knows she made a mistake with her education and says she got bad advice from advisers. Also she listened to everyone who said that education was the way out of poverty.

$25k/year is much better off than having no income or education!


pretty much!!! what other options are available in supporting yourself if you were not born well off? depend on government assistance or perhaps, marriage?

how long were you two dating prior to getting married, did you know this info before hand? if she does not work, who is paying for the wedding?

this is the first time I ever heard that earning a degree is a poor decision!

don't be that guy!!!

sherpster
09-30-2016, 03:44 AM
It is sad how many guys I know, some without degrees of their own, who end up paying for their wife's education loans because the wife has stopped working after marriage. Why did they get those expensive degrees in the first place? My wife has been a stay at home mom for 12 years so I have no problem with stay at home mom's (if she stays home another couple years I might but that's another story).

Do you guys have kids? If not, then there is NO reason she can't work

Molon Labe
10-08-2016, 05:06 AM
IMO this is the best advice on this thread. Show some trust and pay off her loans without making an issue out of it.

On the other hand, telling her that you are not going pay off her loans until you "see how it goes" will plant the seeds for a failed marriage.

This is good advice, also when you pay the loan off, keep records that you did at a location unknown to her. If the marriage goes sideways in the future, the money you spent to "make her employable" can be used in some states as credit in a property settlement negotiation. Most judges will accept an argument that paying off a spouses student loans from before you met her do count for something, And paying for continuing education (or PHD ) will relieve you from the obligation to rehabilitate her back into the work force after years of the chattel servitude of being your housewife. Keep records of all her education costs at a secret location. One so as to no incur resentment on her part, two so if years later she turns evil you will not come home from a trip and find them missing.

ALTBUS
10-19-2016, 12:58 AM
I would make her get a job.
This is too funny.

iFlyRC
10-22-2016, 02:10 PM
I have yet to make money with my college degree. An accomplishment? Yes it was, but I'd rather have the money spent than the warm and fuzzy feeling of earning the degree. Make her get a job to pay it off, that's her burden. Dangle the concept on a stick of you helping her just so she sticks around for a while.

LoneStarM1A
10-25-2016, 02:15 PM
Please, DONT do this!!!



Please, DO this!!!



$25k/year is much better off than having no income or education!


pretty much!!! what other options are available in supporting yourself if you were not born well off? depend on government assistance or perhaps, marriage?

how long were you two dating prior to getting married, did you know this info before hand? if she does not work, who is paying for the wedding?

this is the first time I ever heard that earning a degree is a poor decision!

don't be that guy!!!

Getting a degree in and of itself is a good decision, however one must research the utility of the degree and it's usefulness with respect to supporting oneself. If you get a degree in a useless subject and don't have any other marketable trade or skill, then you just put yourself into deep debt with no realistic way to pay it off.

All I'm saying is that I wish people would tell kids to get a degree that can make a living with, not a liberal arts or psychology degree that is just a useless pile of debt (unless of course they actually have a plan to earn a living using the liberal arts or psychology degree, which seems rather difficult compared to say a BBA, engineering, biology, etc).

The other option if you're not born well off is to learn a trade or get a degree in a subject that's actually marketable, none of the "just follow your heart BS advice".

CAirBear
11-03-2016, 03:24 PM
Call into the Dave Ramsey show. Seriously. The guy is awesome and will tell you exactly what you should do.

chrisreedrules
11-08-2016, 07:21 AM
Dave Ramsey isn't the be all end all. I've heard him give bad advice before. You could take $90K and make more money than you would gain by paying off student loans at 6% interest. I like real estate, but that's an animal that many aren't willing to tame. I earn almost a 10% ROI on one property and I've gained about 30% in equity. Looking to add more in the near future.

DO NOT SPEND 90K paying down your wife's school loans. Like I said, there are much better uses for that money long-term for the both of you. If in 5 years you're still married, maybe consider it then. But depending on the type of account that money is in, you may be facing large penalties. Take the money out in a way that will penalize you the least amount possible.

Pilotpip
11-15-2016, 06:12 PM
If you didn't know about this before marriage, I would be very concerned. Money is the number one reason for stress that leads to divorce.

I had a significant loan balance before my wife and I were engaged. Once I knew I wanted to be with her, we sat down and I was very honest with her about my debt, and that I wanted to marry her, but I didn't want my financial issues to be OUR financial issues. I spent about a year cutting my debt in half, paying off several high interest credit cards (youthful ignorance comes back to bite you). Fast forward six years, we're expecting our second child, bought a nice house that is perfect size for our growing family, and are looking to upgrade to a larger vehicle with more than enough breathing room to be comfortable. I'm fortunate that we both have good careers, and we have positioned ourselves that we can afford everything, with minimal changes (like not eating out so much) on a single income.

It needs to be a team effort, but she has to be the instigator. Bad advice/poor choices/ignorance is no excuse. She signed on the line, just like we all do. No, you don't need her income to pay it off financially, but you need it for your relationship. With her education, and experience, she should be able to find something that would pay it off in a couple years with good focus and that would show her dedication to you.

pjjhawaii
11-15-2016, 07:29 PM
Had a friend pay off his wife's med school, she bailed about a month after the last check cleared.



Seen that too. I would let it ride. Give her time to find a job and contribute. After a few years you guys can decide how to tackle that debt equally.


Sent from my iPhone using Tapatalk

LoneStarM1A
11-18-2016, 11:34 AM
If you didn't know about this before marriage, I would be very concerned. Money is the number one reason for stress that leads to divorce.

I had a significant loan balance before my wife and I were engaged. Once I knew I wanted to be with her, we sat down and I was very honest with her about my debt, and that I wanted to marry her, but I didn't want my financial issues to be OUR financial issues. I spent about a year cutting my debt in half, paying off several high interest credit cards (youthful ignorance comes back to bite you). Fast forward six years, we're expecting our second child, bought a nice house that is perfect size for our growing family, and are looking to upgrade to a larger vehicle with more than enough breathing room to be comfortable. I'm fortunate that we both have good careers, and we have positioned ourselves that we can afford everything, with minimal changes (like not eating out so much) on a single income.

It needs to be a team effort, but she has to be the instigator. Bad advice/poor choices/ignorance is no excuse. She signed on the line, just like we all do. No, you don't need her income to pay it off financially, but you need it for your relationship. With her education, and experience, she should be able to find something that would pay it off in a couple years with good focus and that would show her dedication to you.

I knew about it before we got engaged. Thinking about having kids so not sure if she'll be going back to work at all since I'm gone 60%+ of the month for work.

Std Deviation
11-28-2016, 11:19 AM
I have a masters in psychology. My career? Airbus pilot.:eek:

In all honesty I parlayed that degree - when combined with flying experience - into a lucrative human factors/CRM side business (working with Fortune 10 corporate departments all the way down to the single pilot operators). I also spent an enormous time writing in a psychology program; setting the stage to become published. That's another income stream while sitting on a 26 hr overnight.

I went to a state school so my cost was about 26K in loans. Without a PhD. a psychology degree just does not net more than a modest income.

Even then the 100K psych jobs are few and far between. Private practice in clinical would probably pay the most.

threeighteen
11-29-2016, 01:09 PM
Do not pay off that loan with cash. Invest your cash elsewhere if you want, but paying that off is about as dumb as paying off your mortgage early.

Std Deviation
11-30-2016, 12:18 PM
Do not pay off that loan with cash. Invest your cash elsewhere if you want, but paying that off is about as dumb as paying off your mortgage early.

Not necessarily. It is situation specific with numerous variables. Paying off the mortgage makes sense for some if math works. They'd pay more to the bank than the deduction from the IRS. It's also nice to have the security of never having to work again because you owe no one. Don't like the job you have? See ya boss man. Still need deductions? How about charity donations. Imagine that - helping others.

threeighteen
12-03-2016, 12:52 PM
Not necessarily. It is situation specific with numerous variables. Paying off the mortgage makes sense for some if math works. They'd pay more to the bank than the deduction from the IRS. It's also nice to have the security of never having to work again because you owe no one. Don't like the job you have? See ya boss man. Still need deductions? How about charity donations. Imagine that - helping others.

having cash in pocket is 100% more secure than having a paid-off home (liability) or a paid-off student loan (pointless, what are they going to do if you have to stop paying because some other bill came up? repossess your college degree?)

The cost of healthcare is going through the roof every year from here on out. Soon the only good/timely healthcare will be cash only, direct payments... if you can even find it. If you or your wife gets sick, you're going to want that cash instead of a paid-off house (what if the housing market tanks and you can't sell it if you need to?) or a paid-off student loan (they don't exactly offer College Degree Equity Lines of Credit at your local bank)....

Cash is king gentlemen. If you've got some extra lying around and you're looking for something to do with it, turn it into something that cash-flows monthly. Don't jeopardize your financial security just to pay off a loan.

You could probably buy a decent house with the amount of cash it would take to pay off that student loan, rent out the house, take the extra cash flow from the house (after paying the mortgage) to make the monthly student loan payment, and still have some extra cash coming in. Plus you'd be building equity at the same time.

zerozero
12-03-2016, 01:35 PM
having cash in pocket is 100% more secure than having a paid-off home (liability) or a paid-off student loan (pointless, what are they going to do if you have to stop paying because some other bill came up? repossess your college degree?)

The cost of healthcare is going through the roof every year from here on out. Soon the only good/timely healthcare will be cash only, direct payments... if you can even find it. If you or your wife gets sick, you're going to want that cash instead of a paid-off house (what if the housing market tanks and you can't sell it if you need to?) or a paid-off student loan (they don't exactly offer College Degree Equity Lines of Credit at your local bank)....

Cash is king gentlemen. If you've got some extra lying around and you're looking for something to do with it, turn it into something that cash-flows monthly. Don't jeopardize your financial security just to pay off a loan.

You could probably buy a decent house with the amount of cash it would take to pay off that student loan, rent out the house, take the extra cash flow from the house (after paying the mortgage) to make the monthly student loan payment, and still have some extra cash coming in. Plus you'd be building equity at the same time.

I like a fat cash safety net too (aka: FU Fund).

:)

But student loan debt is particularly troublesome as it cannot be discharged in a bankruptcy and even if you were to retire and stop working the govt (here to help) would come after your social security.

Sadly, college educations have finally become a scam.

Std Deviation
12-05-2016, 07:59 AM
Is that the cash that's backed only by the full faith in the federal government?:D

If we get that far into economic ruin a gallon of water and shotgun shells will be worth far more than a pile of cash. Could be used as a fire starter though.

crewdawg
12-11-2016, 03:59 PM
Dave Ramsey isn't the be all end all. I've heard him give bad advice before.

That and his stuff isn't all that earth shattering to anyone who has half a financial brain. I will admit that he does help LOTS of people and that is great. I think we are terrible at giving our younger generation a good financial education. I guess finances are a taboo conversation to many, which I have never understood.

You could take $90K and make more money than you would gain by paying off student loans at 6% interest. I like real estate, but that's an animal that many aren't willing to tame. I earn almost a 10% ROI on one property and I've gained about 30% in equity. Looking to add more in the near future.


Cash is king gentlemen. If you've got some extra lying around and you're looking for something to do with it, turn it into something that cash-flows monthly.

You could probably buy a decent house with the amount of cash it would take to pay off that student loan, rent out the house, take the extra cash flow from the house (after paying the mortgage) to make the monthly student loan payment, and still have some extra cash coming in. Plus you'd be building equity at the same time.

THIS RIGHT HERE!

Spin
05-05-2017, 10:43 AM
What did you finally do?

LoneStarM1A
05-09-2017, 08:42 AM
What did you finally do?

I payed off $25,000 from my savings of it as her christmas gift and am planning to continue to do so for 3-4 years until it is gone.

Cargo Man
05-09-2017, 11:23 AM
If she requests you pay for any kind of augmentation surgery, run for help.

pilot0987
05-09-2017, 10:18 PM
If she requests you pay for any kind of augmentation surgery, run for help.

Unless it benefits you and brings pleasure than money well spent.