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Optimal Student Loan Management after marriage

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  • Avatar gopheroms 
    Participant
    Status: Resident, Physician, Dentist
    Posts: 1
    Joined: 02/25/2019

    How should student loans best be managed in my situation. I appreciate your time reading this and your replies to anyone who may reply. If a situation such as mine has already been asked and answered in the forums, please direct me to the thread. I apologize if I missed a similar thread.

     

    My situation and plan. Does it make sense?

     

    I am starting my last year of residency and will be entering a private practice position in approximately one year time. I currently have 426k in student loans. I am making payments through REPAYE during residency to receive the interest subsidy and decrease my effective interest rate to the 3-4% rate. Since I will be joining a private practice after residency, I plan to refinance my student loans privately upon graduation and pay them down aggressively. My salary will be approximately 300k after residency and will stay in the 300-400k range until I partnership (after four years) at which point my salary will approximately double.  My question mainly is how to handle my significant others student loans. We are not currently married but plan to get married in approximately two years. She is a teacher (working for a public school) making approximately 45k. She has 90k in student loans and is making payments through IBR and has been for the past three years planning to go for PSLF. She has filed annual employment certificate form for her school so we know that she is on track for PSLF if she continues this for 7 more years (unfortunately she made payments for her first four years of employment thinking she was in a loan program that qualified for PSLF but she wasn’t… sigh).

    I think our current student loan management is appropriate. Looking to the future, however, I want to make sure I am thinking about this correctly and not making any mistakes. I think I should refinance my loans privately, live like a resident, and pay them off aggressively after graduation. I think she can stay in her IBR program (old IBR) and keep making payments to qualify for PSLF. Once we are married and file taxes MFJ, her payments will likely rise to standard 10 year payment as she won’t have finance hardship anymore based on my income. We would then continue to make payments (based on the standard 10 year payments I understand IBR payments should cap out at) until her loans are forgiven at the 10 year mark. I hope I am thinking about this correctly. If you see any issues in my thought process, I would greatly appreciate your replies.

     

    Thanks!

     

     

     

     

    #228579 Reply
    fatlittlepig fatlittlepig 
    Participant
    Status: Physician
    Posts: 874
    Joined: 01/26/2017

    why wait to get married. why are you viewing her loans separately. get married and discharge both loans simultaneously. if anything i would discharge her debt first since it’s peanuts compared to yours.

     

    #228633 Reply
    Liked by adventure, MPMD
    Avatar hightower 
    Participant
    Status: Physician
    Posts: 1448
    Joined: 12/07/2016

    Yeah, there is no question here in my mind.  Treat both of your loans as one.  As soon as you graduate and start making a decent salary, live like a resident and pay off your loans aggressively.  Do the same with hers.  In fact, I would consider paying her balance off first so you can free up cash flow and more aggressively tackle yours.  You’ll be making very good money assuming your salary actually doubles as you state.  Start off on the right foot by getting rid of ALL of those loans asap.

    And yes, I believe you should forget that silly PSLF stuff.  You guys will be making sick amounts of money, just get rid of the loans.

    #228643 Reply
    Liked by FIREshrink
    Lordosis Lordosis 
    Participant
    Status: Physician
    Posts: 1209
    Joined: 02/11/2019

    I agree,  Just pay hers down too.  If you live your networth you should be able to both pay down those loans and maximize tax advantaged accounts.

     

    MFJ will help you way more then PSLF in your situation.

    Get married now when you are a resident and people do not think you are rich.  Unless you both want the big wedding.  Then save up for it.

    “Never let your sense of morals prevent you from doing what is right.”

    #228684 Reply
    Liked by EndoRobert, MPMD
    Avatar EndoRobert 
    Participant
    Posts: 49
    Joined: 01/12/2019

    Have a plan where (all) the loans are paid off before you make partner. Too many threads here lately about associates having their light at the end of the tunnel be a freight train.

    Hopefully your situation is immune to that, but, even if it is, still behavioral reasons to discharge them early on. (It’s why I wouldn’t fool with pslf—>ibr for your wife’s loans. If you’re making 800k/yr is your wife going to continue teaching? Just pay it off with yours.). Good luck! Y’all seem to be doing really well.

    #229234 Reply
    Avatar jhwkr542 
    Participant
    Status: Physician
    Posts: 1210
    Joined: 02/15/2016

    Since you’ll have so many years for her loans paying at the 10 year standard repayment amount, you’ll likely end up paying more at her current interest rate than refinancing. Just be done with hers as well and ignore PSLF.

    #229243 Reply

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