Till Death Do Us Part — Macabre Realizations about My Debt, Mortality, and Marriage
There’s a horrific connection between suffocating student loan debt and the public health epidemic of gun violence.
They’d never been asked this question before, the agent said.
I can’t say I was exactly surprised. I called my student loan debt servicer about a very uncomfortable topic. Just thinking about it unearths all sorts of latent emotional experiences we’d prefer to avoid.
I was calling with a question about death.
Debt, death, and discharge
For years, I’ve considered refinancing my federal student loan debt to a private lender. It wasn’t until winter, however, that I finally made the leap, moving all my education debt to one lender — all $84,000 of it.
For several days before submitting an application with the lender I selected, I diligently scrutinized and comparison shopped. I looked at rates, benefits, and repayment options using tools like Credit Karma, Bankrate, Consumer Advocate, Nerd Wallet, and Student Loan Hero (acquired recently by Lending Tree).
What I did not realize I might be giving up with my federal loans was a morbid benefit I’d never given a moment of thought — discharge at death.
In the unlikely event I die in the next 7 years, possibly due to a public mass shooting, could my spouse-to-be get stuck with the bill because my loan is private?
It’s possible.
Couched in an overly explanative greeting, I awkwardly asked the agent about their policy on discharging debt in the event of death.
For federally-backed loans, the US Department of Education automatically cancels and discharges loan liability in the event of a borrower’s death. Private lenders are not required to do the same.
I selected a lender with a fabulously easy application process that took less than 30 minutes, a highly competitive APR, up to 18 months of unemployment-forbearance flexibility, and a discount for paying via ACH.
Privately refinanced loans nearly always have a more competitive interest rates. This is particularly true for borrowers with excellent credit. Interestingly, despite the ability to save tens of thousands of dollars in some cases, refinancing is underutilized.
Through consolidation and compression of my repayment timeline, I lowered my APR by several percentage points. This will save me at least $10,000 over the course of loan repayment. On the other hand, privately refinancing federal student loans sometimes does mean giving up certain protections — forbearance, deferment, and discharge at death.
My mortality, my marriage
I stumbled into my contemplative, terrorized realization.
It occurred to me so instinctually and spontaneously in a flash of disgust, fear, and anger while reading about yet another shooting.
I could die.
I never imagined that, at my age, I should consider death benefits on my refinancing perks checklist. Of course I didn’t think about dying as a major point of consideration for repayment. I am 33.
Talk about an inflection point.
Culturally, in the United States, we avoid thinking about our own mortality — much less speaking of about it. Or planning for it — especially when youth is on our side (78% of millennials do not have a will).
If the la-la-la-stick-my-fingers-in-my-ears-pretend-its-not-there avoidance of contemplating death remind you of any other topics we like to avoid, it’s probably money. Considering money and death together is therefore a double dose of existential apprehension and emotional discomfort.
Yet, death and money are inescapably symbolic in the human experience:
- Autonomy and power: What do we control? Do we direct our own destiny?
- Mortality and purpose: Why are we here? Is my life meaningful?
- Vulnerability and connection: Are we alone? What does love mean?
To say the least, we are not particularly well socialized to tolerate these sweeping, philosophical uncertainties — especially about what we can control, our identities, and our relationships.
Still, the reality is that I could die just like any one of the people violently executed recently in a big box retailer, somewhere between the dairy aisle and meat counter. That is a heart-wrenching, deeply angering reality. It’s abhorrent that I need to consider dying in the context of refinancing student loans because I could be murdered.
I thought, “Oh my God, I could die — I could DIE— while picking out salmon for dinner and ruin my spouse’s life with unrectifiable financial consequences.”
Depending on the state, laws governing marital property may decide if and how a spouse’s assets could be invoked to settle your student loan debt.
Even if you have otherwise kept your finances separate, it is worth the call to your lender — and looking up your state’s marital property laws to understand how to plan for protecting your partner.
This is why I made the call today. Because my future husband could become responsible for the cost of my education if I am murdered at Target, or a concert, or sightseeing.
This is not the financial planning I had in mind for my future marriage.
I certainly never thought I would need to discuss fear and anxiety about the potential for this situation — because it never even occurred to me this could be a concern. But, today, the scene in my mind’s eye is a chilling biproduct of the intersecting systematic crises of financial inequity and political indifference.
Love — and fight for change
The acts of domestic terrorists are horrific. The incomprehensible hurt our loved ones would suffer if we were suddenly gone feels like nauseating, indigestible emotional sludge.
We must march in the streets, call our legislators, donate to campaigns we believe in — we must fight — for this to end.
And, we must love our partners by examining our hopes, dreams, and fears with naked vulnerability in spite of the existential anxiety it provokes. In relationships where finances are interrelated, considering what might happen to our partner if the unthinkable occurred is the ultimate act of emotional intelligence and courage.
Recommendations
- If you’ve got private loans, call your student loan servicer to ask about their death discharge policy. If you have a cosigner, inquire about their discharge rights as well. While you’re at it, ask if a cosigner be released after so many months of on-time payments; this is a common practice.
- If you’re considering refinancing, use the many free tools available to make an informed decision. Not sure how interest accrual works? Struggle to understand how repayment timelines impact overall costs of debt? Not sure if you’ll save that much, or it isn’t worth the trouble? Credit Karma, Bankrate, Consumer Advocate, Nerd Wallet, and Student Loan Hero (acquired recently by Lending Tree) all have excellent comparison-shopping and number-crunching tools to help.
- Level up your financial teamwork with your partner using Enriched Couples. This web-mobile app is specifically designed to help millenial and Gen Z couples learn how to communicate about money — before it becomes a relationship problem. Unlike budgeting apps, this app uses counseling psychology and relationship enrichment techniques to build new habits to make your relationship and financial teamwork stronger. Currently in beta testing, so if you try it now, you’ll get free access to the version that will cost $15/month/couple after their public launch this fall.
- Consider an inexpensive term life policy. I pay $15/month for $100K of coverage. You’re almost completely paying for peace of mind; once your loans are paid, your needs for this policy will probably have changed. If you’ve ever gotten a form from a credit union in the mail, these are the types of plans I am referring to. They’re called “term” life because they are policies covering a specified period of time, or term. They can be part of a broader strategy, but if your debts are not discharged at the time of your death, a policy like this can help pay off your debts.
- Build a custom financial roadmap for yourselves. Use an ethical, fee-based financial planner who has a signed Fiduciary Pledge. I recommend searching for fee-based planners the XY Planning Network, which was started with a mission to help Gen Xers and Gen Y/millennials approach finances in a much more personalized way. Fee-based planners are paid by you directly — sometimes as a percentage of your investments, sometimes for a flat fee project — rather than for kickbacks for selling you stocks. This reduces conflict of interest, but also costs more out of pocket. This network has a lot of peer millennials who specialize in serving other young adults proactively in the early stages of our lives and careers.
- Check all of your investments for a Transfer on Death (TOD) beneficiary. These are assets like your 401(k) that should always have a beneficiary named. If they do not, they may be subject to more court paperwork in probate and the will — if there is a will, but no named beneficiary — will determine who gets it. You can usually do this online without needing to complete much paperwork, although you do typically need a SSN for the beneficiary you are naming.
- Consider making a basic Last Will & Testament and documenting other wishes legally. I used templates via a free trial on Legal Rocket to make a basic will and advanced medical directives. I needed to sign in front of a Notary Public in the state of Indiana, but it was free and took me about 90 minutes total, including a trip to the bank. Even if you don’t have kids, you should have a plan — although a simple one may suffice**. The rule of thumb that you don’t need a will unless you have kids was borne out of a time insurance was sold door to door, long before the average age of marriage was 28, and well before the average graduate had nearly $30,000 of student loan debt. It certainly predates the reality that preexisting, individual assets and debts make partnerships more complex than this guideline considers.
Annette Miller is the Cofounder and CEO of Enriched Couples, a financial therapy platform that uses psychology to guide couples through unifying their values, financial priorities, and future goals.
