Mr. Hat

10+ Year Member
Dec 20, 2006
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So I'm in the process of figuring out paying off student loans early vs investing vs paying off house quicker blah blah blah. Anyway, my loans are currently government-backed loans with Nelnet as the servicer, meaning that if I die an untimely death my student loans disappear and my wife doesn't have to worry about them. I'm looking at refinancing with SoFi, but am wondering - if I refinance my student loans with a private entity, is that private loan also discharged upon death or would my wife be responsible for it? Hopefully won't be an issue either way lol, but thought I'd ask.
 
Mar 26, 2018
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Private loans have their own conditions....but it’s probably cheaper to get some extra term insurance.
 
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MD Financial Services Scott

Disability and Term Life Insurance Representitive
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Feb 27, 2014
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So I'm in the process of figuring out paying off student loans early vs investing vs paying off house quicker blah blah blah. Anyway, my loans are currently government-backed loans with Nelnet as the servicer, meaning that if I die an untimely death my student loans disappear and my wife doesn't have to worry about them. I'm looking at refinancing with SoFi, but am wondering - if I refinance my student loans with a private entity, is that private loan also discharged upon death or would my wife be responsible for it? Hopefully won't be an issue either way lol, but thought I'd ask.
Most private loans are charged against your estate when one dies so if married it is typically still due.
 
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FutureInternist

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SoFi also has a variable rate that can go as high as 10% based on the last time I called them up.
So unless you have a boatload of money sitting around and you can make a lump sum payment, tread very carefully.

My take is that the paying off the house earlier is likely a better choice since that loan the spouse will be responsible for, whereas the med school loan dies with you.
 
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May want to wait til after the next election. If for some reason a president gets elected who will discharge some of your loans, I have a feeling this only applies to govt. loans
 
Mar 26, 2018
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None of the proposals I’ve read will discharge loans people making significant money.
Don’t forget any legislation have to go through both houses of Congress as well as the president.

I’d plan on paying them.
 
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VA Hopeful Dr

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SoFi will discharge at death, or at least my wife's SoFi loan will
 

cpants

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Pay the student loan first. Refinance for low rate. If not discharged on death just get term insurance to cover the balance. Should be very cheap for small 10 year policy to cover it.

Mortgage interest is tax deductible, should be last debt you pay off in most cases.
 

TheHungarianCPAPFS

CPA, CFP, IAR,Life Agent here to advise
Jan 14, 2020
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I would only refinance if I can get better terms or better interest rate. However, if Sofi's, which most likely would have to be paid off from your estate in case you decease, interest rate is better, then you can get a cheap term life insurance for the next 5-10 years and pay that while you paying off the student loan. Once that is paid off, you can either cancel the life insurance or use it to cover the mortgage in your home.
 

WisNeuro

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I would only refinance if I can get better terms or better interest rate. However, if Sofi's, which most likely would have to be paid off from your estate in case you decease, interest rate is better, then you can get a cheap term life insurance for the next 5-10 years and pay that while you paying off the student loan. Once that is paid off, you can either cancel the life insurance or use it to cover the mortgage in your home.
My wife refi'd with them, as VA Hopeful described above, our contract says they are discharged upon death, no mention of estate having to pay. This was a big deal for us as we have a child, so we actually got another document to this effect from one of their loan officer supervisors or whatever they are. won't be a big deal for very much longer as we're almost done with it anyway, though.
 
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