{"id":6501,"date":"2024-10-24T07:08:40","date_gmt":"2024-10-24T07:08:40","guid":{"rendered":"https:\/\/finderica.com\/should-i-use-165k-in-child-support-to-pay-my-kids-loans\/"},"modified":"2024-10-24T07:08:40","modified_gmt":"2024-10-24T07:08:40","slug":"should-i-use-165k-in-child-support-to-pay-my-kids-loans","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=6501","title":{"rendered":"Should I Use $165K in Child Support to Pay My Kids’ Loans?"},"content":{"rendered":"\n
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\"ScoreCard<\/p>\n

Dear Penny,<\/span><\/p>\n

I will be getting nearly $165,000 in child support arrears from my former husband. I have two kids in college. (Dad doesn\u2019t contribute.)\u00a0<\/span><\/i><\/p>\n

We\u2019ve taken out private student loans to pay for their college tuition. Should I pay toward the loans, or should I invest in something yielding a higher interest rate than their loan interest? I am currently paying all the interest, so as not to compound their loan amounts. I do intend to use part of a yearly bonus to pay off some of the loans as well.\u00a0<\/span><\/i><\/p>\n

-K.<\/span><\/i><\/p>\n<\/div>\n

Dear K.,<\/p>\n

Sure, it\u2019s possible to get returns that are higher than the interest you\u2019re paying. In an average year, an S&P 500 index fund produces returns of about 10%, which is probably a lot more than the interest rates on your loans. Of course, you could also lose money, as we\u2019re all painfully aware of in the abysmal stock market year of 2022.<\/p>\n

Meanwhile, paying down your kids\u2019 student loans presents a guaranteed return in terms of the money you\u2019ll save on interest. But the biggest rewards aren\u2019t quantifiable.<\/p>\n

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