"“I don't find that it's his responsibility to pay on my debt... it's really my debt because I was the one that chose to go to college.”"
"“Money isn't really an issue” and “he can definitely pay it off.”"
"Student loans from graduate programs commonly carry rates between 7% and 9%. On a $28,000 balance at 8%, the interest meter runs at roughly $2,240 a year. Every month Lindsay keeps that loan open, the household pays close to $187 in interest. That is real money leaving a shared roof to satisfy a mental line item that says “mine, not ours.”"
"Compare that to what the same dollars could earn parked safely. The 10-year Treasury yield is hovering near 4%. If the loan rate is meaningfully above the risk-free yield, holding cash instead of retiring the debt is a guaranteed loss. With a $700,000 net worth, the couple is not draining an emergency fund. They are swapping a low-yielding asset for the elimination of a higher-cost liability. That trade wins almost every time the loan rate exceeds the Treasury rate."
A newlywed couple has a combined net worth of $700,000 and about $28,000 in student loan debt. The wife still owes the loans from her graduate education and believes the debt is her responsibility. The couple has enough money to pay the balance, and the main issue is whether marriage requires merging financial obligations. Student loan interest around 7% to 9% creates ongoing monthly interest costs, making delay expensive. Paying off the debt removes a higher-cost liability and frees cash flow. Keeping the debt open instead of retiring it can be a guaranteed loss when the loan rate exceeds safer alternatives such as Treasury yields. Combining accounts aligns incentives and reduces “mine versus ours” friction.
Read at 24/7 Wall St.
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