Life insurance question

thumper1
Wed, 05 Oct 2011 09:30:14 +0000

If the student is receiving ONLY Stafford loans…then the student will CONTINUE to receive the Stafford loans…REGARDLESS OF INCOME OR ASSETS. The life insurance payout won’t affect anything at all.

If the loans do become unsubsidized, I would suggest using part of that life insurance payout to pay the interest as you go…instead of letting it accumulate. It won’t be a very large amount of money to pay each year.

For her sophomore year, she would get $6500 in Stafford loans.

The only difference would be if they are subsidized…or not. BUT the loans will still be there.

There is no need to spend down this money if the ONLY thing this student is getting is Stafford loans.