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Hello, this is my first inquiry on the WCI. I am a first-year med student, about to start my second semester. I am getting married this upcoming Saturday. My fiancée (an RN) and I have talked lots about finances throughout our relationship, though we could use some specific advice. She was fortunate to leave school debt-free. She fully supports my desire to become a physician, as I do her desire to advance in her nursing career.
Here is my current loan balance breakdown:
I know it’s ugly, and I wish I could have arrived to where I am now with much less debt. However, I see it as water under the bridge now, and my goal now is to minimize the debt load upon my graduation.
Of note, that total loan balance could increase by the start of this upcoming second semester by ~40K. This is because I accepted ~$80K for the whole first year, and about half of it disbursed for my first semester. I am in a position to prevent the disbursement of the incoming loans if I fill out a form and give it to my financial aid office prior to January 2, 2018.
Here’s my question: my fiancée has ~160K in Vanguard. She currently earns ~80K, but will be changing jobs to where I am, where the average nursing salary is ~$60K. My school tuition is $56,080/year (not including living expenses). We are wondering whether it’s a better idea to pay off the total current loan balance, and then take out loans just for tuition for years 2,3,4 of med school, or to leave the current debt as is and pay for years 2,3, and part of 4 out of pocket.
As a possible scenario, let’s assume I allow my current debt to grow to ~$157K by allowing the $40K for the second semester to disburse.
I would like your advice because I thought that a good general rule is to pay off existing debt asap, though I’m wondering if in my situation it could make sense to leave current debt as is. I can show how I crunched the numbers too in this thread if you wish.
Thank you!
Here is my current loan balance breakdown:
- Undergrad:
- Stafford-subsidized ($2,940.26 @ 5.6% interest)
- Stafford-unsubsidized ($2,438.82 @ 6.8% interest)
- Direct loan-subsidized ($3,831.02 @ 4.5% interest)
- Direct loan-subsidized ($4,626.18 @ 3.4% interest)
- Direct loan-subsidized ($4,704.99 @ 3.4% interest)
- Master’s
- Direct Loan-Unsubsidized ($23,190.05 @ 5.84% interest)
- Direct Grad PLUS ($35,807.41 @ 6.84% interest)
- 1<sup>st</sup> Semester Med School
- Direct loan-Unsubsidized ($10,517.72 @ 6% interest)
- Direct Loan-Unsubsidized ($11,401.22 @ 6% interest)
- Direct Grad PLUS ($17,738.55 @ 7% interest)
- Total Loan Balance: $117,196.42
I know it’s ugly, and I wish I could have arrived to where I am now with much less debt. However, I see it as water under the bridge now, and my goal now is to minimize the debt load upon my graduation.
Of note, that total loan balance could increase by the start of this upcoming second semester by ~40K. This is because I accepted ~$80K for the whole first year, and about half of it disbursed for my first semester. I am in a position to prevent the disbursement of the incoming loans if I fill out a form and give it to my financial aid office prior to January 2, 2018.
Here’s my question: my fiancée has ~160K in Vanguard. She currently earns ~80K, but will be changing jobs to where I am, where the average nursing salary is ~$60K. My school tuition is $56,080/year (not including living expenses). We are wondering whether it’s a better idea to pay off the total current loan balance, and then take out loans just for tuition for years 2,3,4 of med school, or to leave the current debt as is and pay for years 2,3, and part of 4 out of pocket.
As a possible scenario, let’s assume I allow my current debt to grow to ~$157K by allowing the $40K for the second semester to disburse.
- If we leave the current debt at ~157K, but then pay for years 2,3, and the second semester of year 4 out of pocket, I calculated the debt will be $236,764.49 upon graduation
- If we pay off $117K now, then we’ll be left with ~$40K of debt (second semester disbursement). If we leave that $40K there for 4 years, and take out tuition loans for years 2,3, and 4, then I calculated the debt will be $246,579.39 upon graduation.
I would like your advice because I thought that a good general rule is to pay off existing debt asap, though I’m wondering if in my situation it could make sense to leave current debt as is. I can show how I crunched the numbers too in this thread if you wish.
Thank you!
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