re: Student Loans

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The loans are in my name and are Federal loans (NELNET). My 401k is well funded. I’m just trying to be a good parent and pay off her student loan. She is graduating with a 4.0 for all four years of school. I’m 56 years old about to be 57 so I’m trying to reduce my debt so I can retire and me and my wife can enjoy life. If that’s being a bad parent then I don’t need your silly arse comments.

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Generally speaking, people only move into PLUS loans once they've exhausted eligibility for the objectively better direct student loans. Does she also have separate loans on top of this, or did you guys take out PLUS loans as a loan of first resort and this is all there is?

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should I take money from my 401k to pay off her student loans

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This is the mindset of today’s parents. Why don’t you let your children mature and learn to stand on their own 2 feet?

You’re not doing either of you any favors.

Yep. Not saying your parents were in this situation, but it’s generally the cheapest no collateral loan one can get.

It’s an issue in low income communities. PLUS loans are no credit check loans at a decent rate for people who wouldn’t qualify otherwise.

Now that I know the loans are in your name:



If I personally found myself in your shoes I would make minimum payments until I was age 59.5 then pay them off from my Roth IRA. No tax impact. You can also take out your Roth contributions at any age and pay them off if you have enough.

If I had to get them paid off sooner, and if the tax situation made sense, I would split off funds from one of my rollovers to a separate IRA and take 72T withdrawals, subject to ordinary tax but no penalties, to pay off the loans, probably over five years because that's how long 72T payments have to last at a minimum. There is no tax penalty, but this isn't trivial either.

I would not take out IRA funds early and cause a penalty.

Are they federal loans? If so her payment won't be jack and even without public service/non profit employment they will be forgiven in 20 years of payments.

Mine will be forgiven in 10 years of payments and even making more than the national average household income alone on the new payment plan I have two years of ZERO payments and they are making them even more generous later this year. I might go 3-4 years of $0 payments and every one is a payment closer to my 120 for working for a non profit. Even if I do have to make full payments in a few years I will save a ton of money from basically getting free years of repayment. I don't care about the balance, just the # of payments, and with the new rules the balance doesn't go up even if you don't pay for all your interest.

I am not saying I agree with any of these new student loan repayment rules, but I am sure as hell am going to take advantage of them. Tax man gets me everywhere else.

I advise parents that have a SUBSIDIZED (no-interest while in school) loan as part of their package to consider taking it, putting it in a HYSA and using it if needed.

We did this with my daughter (although I invested it instead of HYSA). Paid them off when they came due and had about $8k to get her started in life.

First off, you are a good guy and great parent for helping your kid(s). F the schools for charging these amounts because the govt backs this shite.


Let her get established and help pay if she can. That burden out the gate can be overwhelming with rent, car note, life expenses.

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he saddled his daughter with over $100k in debt

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The debt is in his name, not hers. She has no obligation to pay but hopefully would help. I had 160k or so at 6 and 7%…have payed almost 60k in interest (why did the government need to make money off me to advance my education)… will finish payments in 10 months thank the Lord