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How much to pay down when forbearance ends?

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  • How much to pay down when forbearance ends?

    I’m having a hard time deciding what to do with our student loans when forbearance ends in a few months.

    Early 30s married with 1 kid in a surgical sub specialty residency. Spouse is primary care attending.


    180k in HYSA/checking
    30k emergency fund
    150k in taxable
    230k in combined tax protected retirement (Roths, 401ks, 403bs)
    8.5k HSA
    We are currently saving around 50k a year after accounting for 20% retirement savings.


    270k federal student loans (hopefully will refi to 3-4%)
    320k on mortgage for current condo (put 36.5k down (10%)

    We live frugally. Own our cars outright and have family for free child care.
    Current income is ~275 for the next 2.5 years and the will increase to 500-750k after that

    Goals: Main goal we are working toward is buying a house. We will live in a LCOL area but want to live on a lake as our primary residence. We plan on renting for a few years when I am done with residency in 2.5 years and then buy our house. Let’s say the homes we would want to look at would be 1-1.5m. I know that’s a lot for a house but we are hoping to save up 500k to put down so our mortgage is <2x income.

    1. Use all 180k towards loans and refi at like 90k student loans.
    2. Carry forward all student loan debt at the low rate and continue saving for home down payment
    3. Pay down some of the student loan debt and save some cash as a base for down payment savings

    We are leaning toward option 3 but down know how much to pay down. Having 150k in loan debt feels better than 270 but the amount seems kind of arbitrary

    Anyone have any insights or advice? Thoughts on how realistic the house is in like 5 years?

  • #2
    If you wanted to do it now it would be a bad choice. If you wanted to do it when you graduated it would be quite tight. 5 years from now I think you are going to be just fine. Even just a few years of living frugally and with that hike mind income you will wipe away those debts and get yourself quite the head start.

    Good luck !


    • #3
      I would keep a healthy e-fund (12 month expenses) and then use the rest to pay off as much of student loans as possible.
      Live like a resident for first 5 years after residency. i.e. keep the same lifestyle and cars.

      if you do this, you will have much more than 500k down payment with loans paid off while also investing a ton for retirement.

      This is an easy plan say, but difficult to follow.

      good luck.


      • #4
        How are you in residency and earn 275k?


        • #5
          Originally posted by Craigslist View Post
          How are you in residency and earn 275k?
          Dual physician household


          • #6
            Option 3 does sound like a good option. Paying down those loans and enough cash flow to work towards the home you'd like to purchase. Should be done with your student loans in a few years.
            Helping student loan borrowers manage their student loans. [email protected]