As you can probably tell from reading this blog, I’m pretty proud of how fast I paid off all of my student loans. It took me just 2.5 years to pay off all $87,000 worth of it. As a brief recap, I started my first job in the fall of 2013, started paying down my debt for real at the beginning of 2014, and paid off the last of my student loans in 2016. By the time I reached a $0 student loan balance, I hadn’t even been in the workforce for three years! In hindsight, that’s actually pretty astounding. There probably aren’t a ton of lawyers out there that are debt free three years out of law school.
With my recent marriage, however, it looks like I’m officially going right back into debt again in the form of my wife’s student loans. She graduated from dental school in 2014. Since then, she’s done a one-year hospital residency and is now currently in the middle of a three-year specialty residency. Needless to say, four years of dental school, four more years of post-dental school training, and no significant income since 2010 means that she’s sitting on a pretty high student loan balance. It’s a little bit over six figures at this point.
I haven’t talked about my wife’s debt all that much because, to be honest, I never really thought of it as my debt. Even though Mrs. FP and I have lived together for a while now, we’ve always kept our finances separate for the most part. That’s not to say that we didn’t know what the other was doing with their money. It’s just that we’ve always done our own thing.
Once you get married, however, your finances aren’t really separate anymore. Her debt is basically my debt now. The good thing for you is that you get to follow along from the beginning as we work towards crushing this debt.
Our Current Debt Situation
Let’s look at where we stand today in terms of our debt. Neither of us has any credit card debt or car loans and we don’t plan to acquire any of that anytime soon.
We do have a mortgage which we’ve been able to afford. Due to some fortunate circumstances, Mrs. FP was able to buy a house before she started dental school. She lived there for a few years with roommates (house hacking for the win!), then rented it out to a family member, and now we live there (with the occasional Airbnb guest). For now, I’m ignoring the mortgage debt simply because it’s not going to be our focus anytime soon.
Student loans are what we care about and we have a lot of it right now. I’m sitting on $0 of student loans, which is a good thing. Paying off all of that debt before we got married really gives our young family a lot more breathing room.
My wife is sitting on $129,489 worth of student loans, with nearly $6,000 sitting as unpaid interest at the moment. These loans are currently in deferment while she finishes out her residency. Apparently, putting her loans in deferment was a big mistake, but we’ll address that issue in the future. For now, what Mrs. FP has been doing is using her savings to pay the interest each year so that it doesn’t capitalize.
In the dental world, Mrs. FP’s student loan balance actually isn’t all that bad. Just take a look at how much tuition costs at a prominent east coast school like Tufts.
And that’s just tuition! It doesn’t even include things like room and board, which easily should add another $20,000 a year or so. At a minimum, your average dental student at a school like Tufts is going to come out with over $280,000 worth of student loans. Yikes.
Mrs. FP was fortunate enough to go to a slightly cheaper school – but not by much. In-state tuition and fees at her dental school are well over $60,000 per year, with out-of-state tuition and fees costing well over $80,000 per year. Due to some unique circumstances, Mrs. FP was able to come out of school with much less debt compared to your average dental student. It’s fortunate and makes things a lot easier for us. Still, remember that paying off debt is never easy, no matter what anyone thinks. It takes work to do it. That’s why we need a plan.
How We Plan To Pay This Off
Right now, our plan is to buckle down once Mrs. FP starts working next year and basically throw her entire paycheck at the student loans. Even though I’m currently working right now, we’ve made the decision to wait until she starts working before hitting her loans. I’m just not making enough right now and I think it’ll frustrate us to see so little progress if I start throwing my meager, state salary at her huge student loan debt. Plus, I’m still saving aggressively in hopes of playing some financial catch-up.
The good thing is, given her expected salary, I think we can get her loans paid off within two years. The key is to basically treat her income as a windfall. We’ve been used to living on my one salary for a few years now. Ideally, we can just keep doing the same thing. Avoiding lifestyle inflation will be key!
The other important thing will be to refinance her student loans as soon as we can. Since there’s absolutely no way we’re keeping this debt around or going for loan forgiveness of any sort, I don’t really see any downside with refinancing. I’ve talked about my own student loan refinancing experience with my law school loans, so the nice thing for Mrs. FP is that she doesn’t have to stumble her way through refinancing like I did.
In terms of how we’ll refinance her loans, we’ll probably initially use a search engine like LendEDU to see what the rates look like for her. It takes only a few minutes to search for rates and it doesn’t do a hard credit check, so there’s pretty much no downside to using it.
Actual numbers are obviously hard to pinpoint, but we can make some estimates. I think a household income for a lawyer and a dentist of around $250,000 seems reasonable.
A $250,000 household income leaves us with an after-tax income of around $159,000. If we leave ourselves about $30,000 a year to live off of and save somewhere around $30,000 – which is around what I saved in 2016 by myself – we’re looking at just a little under $100,000 per year that we can throw towards loans.
Inputting that info into any loan payback calculator shows that, at that pace, we’d likely pay off all of her debt within 15 months or so – a little less than a year and a half.
Can We Do It?
Obviously, it’s hard to say whether this plan will work or not. By the time our household is making a significant income, I’ll be 31 years old and Mrs. FP will be 32 years old. We’re not old by any stretch, but obviously, things can change in the next few years.
Lifestyle inflation is the main thing we have to avoid if we have any hopes of succeeding in paying off this debt quickly. It’s easy for any new professional to come out of school and then immediately start spending that income. The key is to treat that high income as a blessing early on, not as a right. Doctors and dentists get stuck in a crappy position of having to take out a ton of student loans. But they’re also in a position where they can probably make the money to pay them back.
Hopefully, me getting married and now being in debt again means that I can help more of you. I’ve always regretted that I didn’t start this blog up back when I was in debt payoff mode. It would have been nice to have a journal tracking what I was doing and I think it would have been helpful for a lot of people to see exactly what was happening each month with my student loans.
For now, if you’re interested in following along with this debt payoff journey, make sure you sign up below to get all of the latest Financial Panther updates!