pay off a 7% loan?

[wax42]

I have a $5,000 student loan that will soon begin accruing interest at a rate of 7%. I was wondering what you guys think about paying it off right away versus just making minimum monthly payments. My initial inclination is to set aside 10k or so (to cover variance) and invest it in mutual funds, and then set up automatic monthly payments from the mutual fund account to make the monthly loan payments. I think this would be better than paying the loan off immediately since many mutual funds have an expected return of greater than 7% a year. Is there any reason why I should not do this?