Wait Until the Loans are Forgiven?
Carrie in Washington, D.C. and her husband owe significantly less on their home than their student loan debt. Can they switch the Baby Steps to pay off the house first instead of the student loans?
QUESTION: Carrie in Washington, D.C. and her husband owe significantly less on their home than their student loan debt. Can they switch the Baby Steps to pay off the house first instead of the student loans? Dave tells her no.
ANSWER: No. How is he ever going to make enough money to pay off $200,000 in student loans with a Ph.D. in psychology? You don’t have an income plan to go with the expense of this education?
If this is the career track he’s on, you may end up waiting until the student loan debt is forgiven in 10 years. I don’t know how you pay off $175,000 making $65,000 a year. It’s going to take a very long time.
I don’t want to be mean to you guys, but please teach your children not to do this. You don’t spend $175,000 to get a degree that gets you a job making $65,000. That’s not smart for a Ph.D. I don’t want to be tacky with you because you’re there, and I never beat someone up for where they are. I’ve done dumb things, too. I just don’t want to leave this lying in the airwaves that this is an okay process because you guys are kind of trapped, and I hate it for you.
I would just tick along on the home and pay what I could on the student loans and see where that takes us. You never know. He might get some research papers published, get some money, and clean this thing up faster. I hope you can do it faster than 10 years, but it may take until the 10-year mark to clean this up and they forgive it. I would investigate all of those possible angles. I’m sorry you guys are there.