If you took out six figure student loans for a professional degree, what was your strategy

[Anonymous]

If you took out $100K+ for an advanced, professional degree in a presumably high-paying field, what did your finances look like age 25-40?

Did you prioritize paying it all back and “do without” for several years?
Are you covered under PSLF or something else that makes you only have to pay it for a certain number of years?

Did you treat it like a mortgage or just another bill and just organize the rest of your finances as normal? Did you or do you use income driven repayment plans?

When did you feel like you could buy a house, car, or have kids?

[Anonymous]

For the first few years, I paid on a 20 yr plan. Then I got married and we used all of my income to pay down the debt -- which was gone in 2 yrs. When the debt was gone, THEN we started a family. Not having that debt is CRUCIAL to having freedom in your life.

I highly recommend paying it all down and living without the next purchases for a few years. You will NOT regret getting that monkey off your back.

[Anonymous]

Husband and I both had big law school loans. We lived very cheaply to get them paid off asap. We did not want a long-term debt monkey on our backs.

[Anonymous]

I'll answer for DH.

DH started law school at age 25. DH had 100K in student loans and I had 40K. We decided to be very frugal and make paying back student loans a big financial priority, in part because we had a high interest rate but also because DH didn't like the idea of being tied down because of student loans. We lived pretty frugally, but we also had kids early (he was 27, oops) and I became a SAHM. So they weren't paid off until he was 35.

We bought a house when he was 36. I think most people would have done the house first and the kids second, but there are positives and negatives to both timelines. Now he is 39 and we have a NW of 800K, 400 of which is home equity.

I think that we could have paid back the loans in a more financially savvy manner by treating it as just another bill, but there is something to be said for the peace of mind of having it paid off earlier.

[Anonymous]

Lived frugally in a group house until I met my spouse. Made bare minimum payments to my student loans on an income-driven repayment plan, didn’t touch the principal balance in anticipation of PSLF. Stay on the PAYE plan, as it does not factor in spouse’s income for minimum monthly payment. REPAYE forces you to account for spouse’s income, so if you’re dual income and get married very good chance your minimum monthly payment will double. PSLF is basically a game with rules and there’s ways to take advantage of the rules. For example, if you got laid off, you get them to recalculate minimum payment based on little to no income, then that holds for 12 months until you need to recertify income. Meanwhile, you get another PSLF qualifying job at normal salary and get PSLF month credits while paying a super low monthly interest payment. Same thing with ensuring you are in an IDR that doesn’t count spouses income.

Meanwhile Saved for house downpayment and maxed out my Thrift & 401K. Bought house with spouse for $900K in pre-pandemic years, 15% downpayment. Refinanced 4x, keeping our 2.5% 30Y mortgage forever. Paid cash for engagement ring & wedding. Paid cash for a boring dependable new car. All of this was our own money.

Got my slate wiped clean by PSLF recently, six figures forgiven. Took advantage of $0 creditable months during COVID. All in, I paid back around $60K in interest to the Dept of Ed over 7.5 years. COVID payment pause added $30K to my net worth.

If I quit today, my pension would pay out $3500/monthly at age 62. Thrift/401K balances currently around $400K, bank accounts around $160K liquid, backdoor Roth of $60K. This is just my own accounts, spouse has their own money and has always made more than me.

I have a nicer QOL and higher current net worth than my friends who are associates in Big Law who make close to $400K. They pay $3K in student loans every month and it will take them YEARS. They also have a big lifestyle, mostly single so don’t have dual income, nice apartments they rent, etc. If they make partner, they will obviously overtake us.

I’m pretty much at the highest level in govt before I can go private sector.

[Anonymous]

Anonymous wrote:For the first few years, I paid on a 20 yr plan. Then I got married and we used all of my income to pay down the debt -- which was gone in 2 yrs. When the debt was gone, THEN we started a family. Not having that debt is CRUCIAL to having freedom in your life.

I highly recommend paying it all down and living without the next purchases for a few years. You will NOT regret getting that monkey off your back.

+1000

Years ago, spouse and I came out of undergrad/grad school with $80K in loans combined, mostly from spouse and it was all undergrad (grad school was paid for). Both engineers with good salary, we lived frugally (kept older cars, rented basic apt, did driving vacations for long weekends that cost only $500 each, packed lunches 4out of 5 days, etc) for first 2-3 years to pay it all off and save for a downpayment, and put any bonuses directly towards that. We lived off of less than 1 salary during that time. This mentality allowed us to own our first home by age 26, and we also did not buy the most we could---we bought a nice 2000 sq ft 4 bed 2.5 bath in an adequate school district, that was 15 yo. We bought well under what we could qualify for with just one of our salaries. Then we continued to save for retirement and 6-12 month emergency fund. That way when we had kids, we were well on the path to be able to afford part time forone parent, a nanny or SAHP or whatever we needed.

[Anonymous]

I had just around 100k when graduating law school in 2004. However I am still paying them off on a 30 year plan bc the interest is less than 3%. My monthly payments are shy of $400. I could pay them off in cash now but it really doesn’t make sense bc of interest rates.

[Anonymous]

I worked while my husband went to law school and I paid all of our expenses such that he only borrowed what he needed for tuition. He also went to a school that gave him scholarship money (rather than the highest ranked school that accepted him) so that we only had to borrow the federal loan limit which at the time was 18.5k a year at 2.8%. After three years of on-time payments that dropped to 1.8% so we are not accelerating at all. His two summer internships he earned about $50k which we put aside to buy a house.

When he graduated in 2007 he was making $160k/year and we bought a $450k townhouse with 10% down (we later refinanced.) Within a year I had our first and became a SAHM. About six years later we bought a (modest, not crazy) SFH where still live, and we rent out the townhouse. His loans will be done in 2027 (20 years) and they really haven’t affected us much at all.

[Anonymous]

We graduated from law school in 2002 and were able to consolidate at below 2%.

We paid on schedule and didn’t really change our plans. DH did a clerkship and we used his signing bonus to purchase a starter home in 2003. Purchase our “forever” home in 2008. Had our first child in 2005 and I became a SAHM in 2010.

No family help whatsoever. We paid for everything’s including our $2,000 wedding and honeymoon.

Planning to largely fund our kids college and graduate school. The cost of graduate school is much higher now than in 1999-2002, so we feel we really should help them since we can afford it.

[Anonymous]

I graduated with about $90k in loans from my MBA program and had a 10 yr payment plan. I paid it off in about 7 years right after having my first kid. In those 7 years I made regular payments, lived at home and did long distance and made double payments. My husband graduated with about $180k of debt from an MBA program right before we had our first. Since my loans were paid off I could use my income to pay rent and the nanny while he aggressively paid off his loans. We lived in nice rentals until most of his loans were paid off and we had saved the down payment in cash (without selling any equity from our jobs). Alot of people thought we were crazy for renting and not buying and that we were throwing our money away but the money we would have spent on maintaining the house and big projects went towards loans. We didn't want to sell off equity for a down payment because that equity grew more then a house would appreciate (FAANG company). We also didn't know where we were going to settle down. Once my husband found his dream job, we moved and bought a house with less than 3% interest rate. It's a house we can live in forever. So our strategy was to really focus on paying off loans before we committed to a house and that ended up being the right strategy for us.

[Anonymous]

I graduated with $200k in debt just 5 years ago. I’m on the PAYE plan, but working a high pay job with no chance at PSLF so I’m not sure it’s the best choice. We bought our house 4 years ago and have 2 kids. I’ve just been treating the loan as another bill and paying the monthly payment. We still fund our 529s, 401ks, and save otherwise.

[Anonymous]

Spouse had $250k of undergrad and law school debt. Did not get a job in biglaw and took a lesser job making just over $100k. I met her 10yrs ago when she was working that job. Things were tough for a while as I was younger and didn't earn a lot either. Over the past decade, more so the past 5 years, we have moved up the career ladder and now make $500k+ HHI in our mid 30s. We're down to $100k in student loans and going to pay most of the rest off in a couple of months. At this income level I'm not worried about student loans - its jsut another budgetary item that results in us saving less than otherwise. We just bought our first home and things are awesome. If we weren't making significant income I would be in a different position.

[Anonymous]

I didn’t have $100k loans, more like $50k but I paid them all off after DH and I got married and combined our finances.

[Anonymous]

DH lived in a group house that he shared with 6 other people (two sets were couples who shared a room). He drove a rusty car and packed his own breakfast, lunch and dinner. He paid off all of his loans by 27. Neither of us really made a lot of money then, just lived very, very frugally.

He lived in a way that I wouldn't have felt safe living, but he's a tall, strong guy. His car frequently broke down and left him stranded. His apartment was broken into several times. His apartment also had bugs.

[Anonymous]

I had a bit over $100k from law school, but graduated in 2007 when interest rates were very low, so paying the down wasn't (and still isn't) a huge priority. I did pay off the end of my private loans early after I started in my current job where we get around $40k in bonus each year. Otherwise I just treat the payment as a bill and don't think about it. I'm making more in CDs now than my current 4% interest rate so no rush to pay down in my house.