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PSLF or not

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  • PSLF or not

    Let me know what you think about our current plan. What things should we change ?
    • Stage of Life: Attending to be 7/1. Spouse 4+ years attending (35 and 32 years of age)
    • Social situation: Double Physician household ( 1 child and another upcoming) Anesthesia and Peds
    • Annual household ncome: Currently 220K with last year of fellowship( combined)
    • Upcoming salary should be 400k
    • Combined salary pending:580-600k gross
    Planning to Max out 403b and 457(nongovermental)- me
    Max out 403b and 457(govermental)- spouse
    10% match for wife which rounds out to 18-20k by employer
    7 % match for me which rounds to be 20-22k by employer
    HSA max 7100
    Backdoor roth for both: 12000
    • Net Worth: negative infinity
    • State of residence: midwest
    • Insurance Policies:
      • 20 year term life 2million, 30 year term 1 million for DH
      • Employer provided life insurance ($500,000 me, $400,000 spouse)
      • DI 5k for now will bump to 15k once on attending salary
      • Adequate home and auto policies
      • Malpractice covered by employers
    • Debts:
    • Monthly expenses~ 11k including loans,daycare, etc using personal capital
      • Spouse student loans: $450 ~6.75. Currently paying approximately 1300 (PSLF) about 72 payments
      • My student loans: $340K at 6.75%; paying 260 on IBR. approximately 60 payments in
      • Cars: my car: 14K left, Spouse 11K left( Plan to pay off within months of attending)
      • Mortgage #1: $327,000 at 4.0 ~ 2100 mortgage
      • Spouse credit card: Paid off all CC moonlighting
      • My credit card: Paid of all CC from moonlighting
      • Total debts: > 1 mil

    I have been having this conversation with my wife. For her loans, will just have go the route of PSLF. She makes about 180-190 (academic)for total gross after moonlighting. I will make approximately 400K 1st year out (Academic). Was planning to refinance my loans and just pay it off in 4.5 years.Or just do PSLF side fund and complete the 120 payments for frogiveness. Will PSLF, no balloon tax at the end.

    We consider going BFE america, get paid 600k plus for me and 300k for her but I don't see myself staying that location for more than 1 year but the loan repayment and signing bonus is contingent on 3 year agreement.

  • #2
    Your first instinct is correct: refinance as soon as you can and pay your loan off. You'll be able to kick it in 4.5 years or likely less with that income. I refi'd two years ago at $350k and we are down to $220k making under $300k combined per year, with two kids. Spouse found a much better job outside 501c3 than she would have at a qualifying employer. We also said No to the BFE option.

    You didn't mention if you had a job in-hand that was qualifying or not, so I assume you're still looking?


    • #3
      I have a job in hand 400K 20K signing bonus (academic) with 8.5weeks vacation. We both work in academic currently. Planning to stay at the same institution. Leaning toward variable rate for refinancing


      • #4


        • #5
          Thorough, well-thought out plan. You'll be fine.

          Personally I'd consider doing PAYE if you're both eligible and seeing how PSLF works out with side pot. Mathematically that's probably correct thing given that you're halfway to PSLF. Just depends on your comfort level.

          The thing that really jumps out at me is your total spending though to be honest - $11,000/month is too much given that only $1500 of that is loan payments and what seems to be a LCOL area - $340k for mortgage. But maybe I'm missing something.


          • #6
            Debt meet shovel.