My spouse and I (both 27) are working on coming up with a strategy for our debt. We currently have $36,795 in total debt:

Car Payment 1 -- $5,165 @ 2.09% -- $264/month payment -- 1.5 years remaining

Car Payment 2 -- $18,413 @ 1.90% -- $383/month payment -- 4 years remaining

Student Loan 1 -- $12,217 @ 3.33% -- $136/month payment -- 6 years remaining

It pains me that every month, almost $800 is going toward loan payments. I realize the interest is very reasonable, but I would love to have this cash flow back. On the other hand, I would also love to never take out another loan again in my life (not counting a mortgage). So here's my dilemma:

My spouse is most likely going back to grad school in the fall. The program costs ~$30,000 total over 3 years. Due to some recent cash inflows, we currently have $13,000 sitting in a 2.1% savings account. My initial thought was to pay down my current debt as quickly as possible with this extra cash. By doing this, I could get both Car Payment 1 and Student Loan 1 paid off easily by the end of the year. However, this would require us to take out more student loans for grad school. So I'm second guessing myself and am wondering if saving that money to pay for grad school out of pocket and saving up for future car purchases or other "big ticket" items is the right call here to prevent the need to ever take out a loan again.

Any insight? Thanks in advance!!