Those who earn more have student loan debt just like average income earners—the difference is that most high-earning individuals’ debt is higher. Those with medical and law degrees, for example, may look forward to a bigger paycheck, but when as much as $4,000 per month has to come out of it—for the next 20 years— to pay back student loans, it can be pretty daunting.
However, high net worth families have more options than the average family when it comes to financing education. Investment interest is deductible, so some clients can margin loans or can pledge asset loans against investment accounts to get partially deductible loan interest for their kids. Considering loan payoff as an advance on inheritance can also be appealing to clients. The bottom line is, there are options for high net worth parents to help their kids pay off student loans.
Experts say, when it comes to education, it’s worthwhile for advisors to learn as much as they can about federal financial aid and the options available to high net worth families.