Author Topic: SO with piles of debt?  (Read 3825 times)

stacheasaurus

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SO with piles of debt?
« on: September 18, 2019, 03:45:08 PM »
Hi,

Looking for some advice in dealing with a likely common situation among young professionals.

My (27M) current girlfriend (24F) of 2 years went to college, graduated, and then decided to go to graduate nursing school.  I recently found out combined school debts are totaling around ($210,000) (almost vomited when I learned). After nursing school, her prospects could be $80-100k with overtime.

We get along well enough, and she has mustachian tendencies and adopts the mindset, but this is weighing on me like a sack of bricks.

There have been surface conversations about this, but long term I would basically be marrying into a ridiculous hole.

Has anyone successfully gotten past a significant amount of debt with their SO?  How do you recommend advancing in this situation?


bbqbonelesswing

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Re: SO with piles of debt?
« Reply #1 on: September 18, 2019, 04:10:22 PM »
If her earnings potential is $80-100k, that isn't so bad. As long as she is responsible and paying down her debt, it should be none of your concern. Be glad she didn't spend $210k on an underwater basketweaving degree instead of nursing school.

Part of being in a serious relationship is working through tough problems together. If it is really bothering you, tell her, and draw up a plan. It sounds like she already has one that perhaps you don't know about.


Rocky Mtn FI

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Re: SO with piles of debt?
« Reply #2 on: September 18, 2019, 04:14:28 PM »
I'm not impartial here as the member of my own marriage carrying a large amount of debt from graduate school, but if you love this girl enough to want to marry her, this doesn't strike me as the sort of thing that should derail that train.  There are all sorts of ways you could play this, from a prenup to postponing marriage until she pays down the debt to a certain level to just deciding to accept it as part of the deal and helping her pay it off.  How you navigate that is up to you and her.

But if she's going to be using the degree to earn a decent salary and otherwise manages her/your money in a way that doesn't alarm you, there are far, far worse things that you could learn about your prospective spouse than that she spent more than you'd like her to have spent on school.

Work with her to devise a plan to pay it off, execute that plan on autopilot, and think about it as little as possible while you enjoy your life together.

socaso

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Re: SO with piles of debt?
« Reply #3 on: September 18, 2019, 04:21:14 PM »
Do you read Slate.com? Just today on Dear Prudence someone wrote in with a very similar problem. You might want to check out the advice.

Obviously this warrants a conversation. It's a pretty vulnerable thing for her to even tell you this. She might be embarrassed and/or overwhelmed by this situation. You don't have to be responsible for her debt but there are other ways partners can support each other in paying down debt. Perhaps if you live together you might pay a higher portion of the rent/mortgage or other expenses so she can free up more money to pay down debt faster. You might help her formulate a plan and a budget to help her deal with the debt. You might pick up the bill when you go out to dinner sometimes.

You might do all or none of these things but you should definitely ask her what her expectations and plans are for the debt insofar as the relationship is concerned.

Dicey

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Re: SO with piles of debt?
« Reply #4 on: September 18, 2019, 09:00:19 PM »
If all the debt went toward her education that's one thing. If some of it was so she could take trips on breaks and vacations and buy fancy shoes, that's another. Find out the provenance of the debt. This is not necessarily a deal breaker. I surely wouldn't get married before you figure this out.

nessness

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Re: SO with piles of debt?
« Reply #5 on: September 18, 2019, 09:24:05 PM »
In my opinion, the biggest red flag in your post was your description of your relationship. You're talking about marrying this girl but all you can say is "we get along well enough"?

Do you love her? Do you want to spend the rest of your life with her? Is being with her more important than FIREing as soon as possible? If you answered yes to all these questions, the debt problem is surmountable, especially given that she's frugal now and has good earning potential. But if not, it's probably a good time to reevaluate your relationship.

Giro

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Re: SO with piles of debt?
« Reply #6 on: September 18, 2019, 09:28:34 PM »
I was homeless in college and had to max out loans while living in my car.  I graduated deep in debt.  Within 5 years of earning my MBA, I was netting 6 figures in one of the lowest cost of living areas in the country.  I am now in my 40s and will earn close to $500k this year...still in cheap backwoods USA.   If my boyfriend would have had a conversation with me about my pre-him debt, I would've been embarrassed and too proud to stay with him.  It would've been his loss.  Im not great at relationships, but ive never not pulled my weight financially.  It sounds like she is an educated gal with career goals.  Head and shoulders above most, I'd say.

charis

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Re: SO with piles of debt?
« Reply #7 on: September 18, 2019, 09:36:11 PM »
Wait, you would have dumped your partner for trying to have a conversation about your debt/finances? And it's his loss?

stacheasaurus

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Re: SO with piles of debt?
« Reply #8 on: September 19, 2019, 05:12:22 AM »
Do you read Slate.com? Just today on Dear Prudence someone wrote in with a very similar problem. You might want to check out the advice.


Read the article, some great points.  Thanks for the recommendation!

In my opinion, the biggest red flag in your post was your description of your relationship. You're talking about marrying this girl but all you can say is "we get along well enough"?

Do you love her? Do you want to spend the rest of your life with her? Is being with her more important than FIREing as soon as possible? If you answered yes to all these questions, the debt problem is surmountable, especially given that she's frugal now and has good earning potential. But if not, it's probably a good time to reevaluate your relationship.

I do love her, but the money problems are impossible to compartmentalize and do impact our relationship.  Thank you for the response!


I appreciate everyone's engagement and the general consensus that her mindset and eventual income are much bigger than her current debt situation.

ctuser1

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Re: SO with piles of debt?
« Reply #9 on: September 19, 2019, 07:42:18 AM »
I do love her, but the money problems are impossible to compartmentalize...

It sure is possible...

Is she open to honestly discussing what is potentially a vulnerable and difficult topic for her?
Does she acknowledge the "financial issue" the debt jointly causes you and her?
Is she open to making her share of the joint effort to required to jointly dig out of the hole?

If the answer to all of the above it yes, this it sure is possible to compartmentalize. A "just money problem" in that case should not cause issues to your relationship - else the relationship is not real.

It's also completely fair for her to turn around and ask the same question from her POV - BTW.

If the answer to any of the above it no, either asked by her or by you - then you have a relationship problem, not a money problem!! If that can't be fixed - run!!!


ReadySetMillionaire

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Re: SO with piles of debt?
« Reply #10 on: September 19, 2019, 07:47:01 AM »
I'm biased, because I came into my relationship with about $150-160k in debt.  Thank God my wife didn't think it was a dealbreaker (possibly because she also had $90k in loans when she graduated).

In my opinion, it all comes down to whether you love your significant other. And I mean well and truly love her, and you'll stick with her through thick and thin. Those types of relationships are very hard to find, and you should hold on tight.

Something I've always carried with me is my dad's saying: "Everyone has a story. Don't judge." You are never, ever, going to find a perfect person, let alone a person you are going to be physically, romantically, and emotionally attracted to.  Everyone will always have some sort of baggage.

In my opinion, if you love her, make a joint plan. My wife and I crushed her loans in two years (before we were even married). We then moved to mine, and they are down to $100k.  We have a joint plan for attacking the rest of them, but we put this on pause while we our figuring out our first son's finances.

And that's my only point I'll make about finances. If you think your life is going to be one straight line to FI, you likely have another thing coming. Things happen. Kids happen. Injuries and surgeries happen. Starting a business happens. We have audibled our plan more times than I can count, which is fine, because my wife is an awesome person and I love her, and our wellbeing comes before numbers on a screen.

terran

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Re: SO with piles of debt?
« Reply #11 on: September 19, 2019, 07:56:21 AM »
A mustachian with $200k of debt will come out ahead of a non-mustachian in the end. Every. Single. Time.

Of course, having $200k of debt could mean she's not really a mustachian. As others have said, the question is whether that represents living beyond her means, or whether it's just what this degree costs and taking on debt was the fastest way to get into a career where she can earn plenty to pay off that debt.

ctuser1

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Re: SO with piles of debt?
« Reply #12 on: September 19, 2019, 07:56:37 AM »
Reading so many money->relationship issue threads I sometimes wonder whatever happened to the whole "Till death do us part" part!!

Was anybody ever serious about that bit??

I already feel like a curmudgeon sometimes.

terran

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Re: SO with piles of debt?
« Reply #13 on: September 19, 2019, 08:01:15 AM »
Reading so many money->relationship issue threads I sometimes wonder whatever happened to the whole "Till death do us part" part!!

Was anybody ever serious about that bit??

I already feel like a curmudgeon sometimes.

Divorce rates would indicate no. At least the younger generations seem to be reversing that trend somewhat, at least last I heard stats on it, by being more careful going in.

charis

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Re: SO with piles of debt?
« Reply #14 on: September 19, 2019, 08:37:30 AM »
Reading so many money->relationship issue threads I sometimes wonder whatever happened to the whole "Till death do us part" part!!

Why that apply to unmarried couples, like the OP and his girlfriend?  This is the precise time that he should be asking important questions like this, before marriage.

ctuser1

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Re: SO with piles of debt?
« Reply #15 on: September 19, 2019, 08:57:28 AM »
This is the precise time that he should be asking important questions like this, before marriage.

Indeed!!

I saw the OP ask a financial question and make a hard stop there. I never saw him ask the "important questions" or even consider them in his replies.
« Last Edit: September 19, 2019, 08:59:46 AM by ctuser1 »

charis

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Re: SO with piles of debt?
« Reply #16 on: September 19, 2019, 09:26:32 AM »
This is the precise time that he should be asking important questions like this, before marriage.

Indeed!!

I saw the OP ask a financial question and make a hard stop there. I never saw him ask the "important questions" or even consider them in his replies.

Financial questions are absolutely important questions.  Money problems is one of the top reasons for divorce, so it is misleading to suggest that he is not asking an important question.  There is no 'death till they part' here, they aren't married. 

use2betrix

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Re: SO with piles of debt?
« Reply #17 on: September 19, 2019, 09:38:58 AM »
Sounds like if she’s mustachian, she can knock that out in 3-4 years.

My wife was 18 when we met. She had zero debt, zero bills, and zero income lol. It worked out fine for our situation.. She’s still basically the same, 7.5 years later.. zero debt, zero bills (aside from phone, health insurance, car insurance) and minimal odd job income! I’m fine with that, she’s 1000x more mustachian than I’ll ever be..

Everyone’s situation works out differently.

MilesTeg

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Re: SO with piles of debt?
« Reply #18 on: September 19, 2019, 10:17:34 AM »
Hi,

Looking for some advice in dealing with a likely common situation among young professionals.

My (27M) current girlfriend (24F) of 2 years went to college, graduated, and then decided to go to graduate nursing school.  I recently found out combined school debts are totaling around ($210,000) (almost vomited when I learned). After nursing school, her prospects could be $80-100k with overtime.

We get along well enough, and she has mustachian tendencies and adopts the mindset, but this is weighing on me like a sack of bricks.

There have been surface conversations about this, but long term I would basically be marrying into a ridiculous hole.

Has anyone successfully gotten past a significant amount of debt with their SO?  How do you recommend advancing in this situation?

This question pops up a lot on this forum.

My advice is: if you are stumbling this badly over a school debt, you are not even remotely ready to even consider marrying someone (anyone). Nearly every long terms relationship is going to experience a LOT worse problems than a lot of school debt. Decisions over whether to have children, infidelity, substance abuse, real financial hardship, family drama, health problems, etc.

You need to experience life a bit more before you dive into a permanent relationship.

stacheasaurus

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Re: SO with piles of debt?
« Reply #19 on: September 20, 2019, 12:18:41 PM »
Everyone, thank you for the responses. 

The general consensus is two fold:

1) I am insensitive about her situation.  Everyone has baggage, not everyone is perfect

2) I do not actually love her, otherwise the money situation would not be a problem to me.



I do love her, and thus this question is important.  If we are starting off in the hole together, with FI goals, and children goals, something must be prioritized.  As someone indicated previously, money problems are a major driver in divorce, so long term relationships will be stressed off the bat.  Not by an unexpected medical expense down the line, but immediately, staring it in the face.  Is that something you would recommend?  Maybe you suggest I don't see the big picture -- 10 years down the road, her mustachian tendencies will far outweigh her current debt.  True, but again this is an amount i have yet to see posted in this forum (I invite others to send me threads here, happy to do more best practice learning) where a sub-100k debt is more practical in resolving.  As a reminder, a 20 yr student loan at 200k is around $1,300/mo (not an invitation to start a political discussion about parental responsibility to lead their 18 year old child down this path, but, alas...).  Since I do not have a high source of income, is it not irresponsible for me to overlook this topic? Is it my fault for not having a higher source of income?

One suggestion I've received was to pretend she had 0 debt.  How would I feel then?  I think that is a useful thought experiment that had some good results.


Laura33

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Re: SO with piles of debt?
« Reply #20 on: September 20, 2019, 07:54:20 PM »
So first, the only opinion that really matters here is yours.  If 100 people here say it's fine, and you still can't get past it, then you need to break up with her.

That said, if I were in your shoes, I would figure out the "why," because that's what speaks to the important things about her character and priorities.  Did she make a well-reasoned decision to pursue a career with six-figure possibilities, did the debt reflect what she had to spend given the options available to her, and does she have a plan to pay that debt off quickly?  Or maybe did she make decisions at 17 or 18 that she now recognizes were mistakes -- the wrong college degree causing additional post-graduate costs, an expensive college because her parents told her not to worry about the money, etc. -- and she has learned from those experiences?  Or maybe she was completely frivolous and bought a lot of fancy/unnecessary stuff with that money, and has now realized how stupid that was and regrets how much those decisions interfere with her real plans and dreams? 

All of those people are very different people than someone who blithely chose schools regardless of cost or career, took out as much as someone would lend her and spent every penny, and wonders why you're making such a big deal about it since "everyone" has debt.  Which one is your GF?

That is why people are saying don't focus on the money:  because in the end, what matters is not the money itself, but what the money says about the person who owes it.  Right now, $200K sounds like a huge amount of money.  And I don't want to belittle that, because you are right, it will affect what you can do for your first few years of married life.  But over a 50+ year marriage?  It's nothing -- it's just an annoyance that you can blast out of the way in the first few years and then tell stories to your grandkids about how tight things were when you were young.  What matters far, far more is whether you and your GF currently share the same values and dreams and priorities.  Because like @terran said:  in the long term, you will wind up far better-off financially with a Mustachian who starts off $200K in the hole than you will with a non-Mustachian who starts off with $200K in assets. 

Trust me on that, as I married the latter (high-earner, high-spender).  And I will tell you, despite the giant firehose of cash that came pouring in, we still had arguments about money.  How is that possible?  Because we disagreed about what we should do with that money.  That's why the people who say most marriages break up over money are wrong.  The truth is that most people break up because they disagree about what to do with money -- and then cannot communicate effectively, and so never figure out how to reach compromises that make both partners happy.* 

Sure, there are some people who are truly poor, can't climb out of debt, and break up simply over the constant stress of never having enough.  But that's not you.  With your GF making $100K, you will have more than enough to pay your bills, pay the debts, and still save, even if you don't bring in any money at all.  And that means that this isn't a money issue -- this is a goals-and-priorities-and-communication issue.  So talk to your GF and figure out if you are closely-enough aligned in what really matters to build the kind of future both of you want, on a timeframe that you can both be happy with.

*We still disagree on the money bit, but we at least managed the communication and compromise stuff well enough to make it 23 years and counting.

Fuzz

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Re: SO with piles of debt?
« Reply #21 on: September 21, 2019, 01:20:12 PM »
I certainly don't think that asking this question or having these doubts means you don't love her or shouldn't get married. It's a fair question in my view.

One piece that you haven't shared, and I'd be curious why, is your income. If you're in the same zone as her: 80-100K/year of income, then her student loans are equal to about a year of your combined income. That's pretty manageable. I'm not saying that you need to pay her loans, but when you marry and form a household, your income will go to household expenses. If your income covers rent (which you're going to pay anyway) and the extra groceries that come with an extra person, then she can knock out that debt quickly.

The other piece is that you're both relatively young. If she is making 100K/year starting at age 24 or 25, that's really impressive and she has plenty of time on her side.

If she was 30 and had no debt/low income/no savings, that would be a pretty normal situation and you wouldn't even have a question about debt.

Also - the amount of student debt in this country is outrageous. Objectively, it's an enormous pile of money and a generational crime that will distort her 20s. But she'll manage it. I don't think it's fair or right as a policy matter. But she'll be okay.

marty998

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Re: SO with piles of debt?
« Reply #22 on: September 21, 2019, 05:23:46 PM »
Here's a thought....what's the net present value of a $100k a year career for 35 years? That's the asset she is bringing to the table against a $200k debt.


Goldielocks

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Re: SO with piles of debt?
« Reply #23 on: September 22, 2019, 12:16:17 AM »
Sure, it's a huge sum of money, but that could be taken care of within 4 years..IF there is a plan... what has me more concerned:
My (27M) current girlfriend (24F) of 2 years went to college, graduated, and then decided to go to graduate nursing school. 

She graduated (presumably with not insignificant debt) and then decided to go (directly?!?) into graduate nursing school, incurring more debt.

At the age of 22, she should have been well able to realize that she needed to pay off her undergrad student loans before incurring more large debt, especially if the curent loans had interest growing on them.  Aren't you scared to marry someone who would willingly pony up to more, huge, debt before paying off existing debt?  Someone who made that choice only 2 years ago?

IMO, you only go into grad school (in a normal, single person, age 22 situation), debt free, or with subsidies for grad studies to ensure no more debt is created.

If not - you go to work for 2-3 years first, pay off as much as you can, then go to grad school.   Please tell me I have it wrong, that she had virtually no undergrad debt and incurred $200k of debt in grad school alone (gasp, private school?).

If not -- what has dramatically changed in her outlook over the past 2 years?  I would give her a year of proving that change (by paying down a lot of debt), and then marry her.
« Last Edit: September 22, 2019, 12:18:22 AM by Goldielocks »

Malkynn

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Re: SO with piles of debt?
« Reply #24 on: September 22, 2019, 06:12:50 AM »
It's not a question of whether or not you love her, it's a question of whether or not you respect her and the education and career decisions she has made for herself.

She made the decision to leverage a lot of debt for a solid, high paying career, which I presume she enjoys. She hasn't done anything wrong, she hasn't committed some kind of crime, she's made decisions for herself that I imagine she believes are worth the trade off.
Is she smart? Did she think it through? Does she have a plan for handling the debt?
All of that matters far more than the fact that she has debt.

If you met her in 4 years and she had had debt, paid it off, and had a solid career as a result, would her history of having leveraged expensive education for her career be a turnoff for you? Would you even care? Would you be judgmental?

This really, really isn't about her debt, it's about how responsible she is and how much you respect her ability to handle her own affairs.
If she has her head in the sand, ignores the debt, and when you talk about finances, all she can focus on is the "dream home" she pictures the two of you in and refuses to even talk about savings...then yeah, that would be a problem. If she made careful and deliberate educational decisions, takes her debt seriously, and has a solid plan for paying it off, and is focused on saving for retirement...then you don't have a problem, you have a smart woman who loves you and you are lucky.

Chances are reality is somewhere between those two extremes, and if you don't know where she falls, then you don't yet know her well enough.

Talk to her, find out if you two are financially compatible. Don't treat her like she's done something wrong just because she comes with debt. It's not like you found out she secretly has hundreds of thousands in credit card debt from a shoe shopping addiction.
Don't treat her like some kind of criminal who needs to defend herself, treat her like a person you love and try to understand why the debt is so large, how she felt about it along the way, and how she feels about it now.

Put the work in to understanding who she is financially as a person, and if you find that you deeply respect the way she thinks about money and plans to handle it, then you have a non issue on your hands. If the way she sees money gives you pause, then you may not be as compatible as you think, but that would be true regardless of how much debt she has.

It's not about loving her despite the bad, dirty debt she comes with and figuring out how to cope with it. That kind of thinking is pretty toxic, so be very careful with that.



mistymoney

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Re: SO with piles of debt?
« Reply #25 on: September 22, 2019, 07:26:35 AM »
Everyone, thank you for the responses. 

The general consensus is two fold:

1) I am insensitive about her situation.  Everyone has baggage, not everyone is perfect

2) I do not actually love her, otherwise the money situation would not be a problem to me.



I do love her, and thus this question is important.  If we are starting off in the hole together, with FI goals, and children goals, something must be prioritized.  As someone indicated previously, money problems are a major driver in divorce, so long term relationships will be stressed off the bat.  Not by an unexpected medical expense down the line, but immediately, staring it in the face.  Is that something you would recommend?  Maybe you suggest I don't see the big picture -- 10 years down the road, her mustachian tendencies will far outweigh her current debt.  True, but again this is an amount i have yet to see posted in this forum (I invite others to send me threads here, happy to do more best practice learning) where a sub-100k debt is more practical in resolving.  As a reminder, a 20 yr student loan at 200k is around $1,300/mo (not an invitation to start a political discussion about parental responsibility to lead their 18 year old child down this path, but, alas...).  Since I do not have a high source of income, is it not irresponsible for me to overlook this topic? Is it my fault for not having a higher source of income?

One suggestion I've received was to pretend she had 0 debt.  How would I feel then?  I think that is a useful thought experiment that had some good results.

What is your income? total household income you expect down the line is important to determine the impact.

And when will GF get the job? Is she still currently taking loans? Is she earning anything currently? One immediate focus would be to at least be paying the interest monthly.

Another way to look at this - lets take a 2k/month payment (10 year repayment estimate) and say she gets a 90k job.

That would kinda be an equivalent of a 66k/job without the student loan. How would that make you feel about a partnership? At 66k, maxing retirement of 19k 401k and roth of 6k, she'd need to live on the equivalent of 41k. Not bad I think.

I think the big thing, I think what prudie gets wrong here, to me, it would be about personal responsibility and trust. I wouldn't expect anyone to help me pay off my own student loans, the thinking is that the loans were acquired for the purposes of acquiring an education of greater value. I'd want to pay them off myself! otherwise - you'll never see the real value of it.

But I would want any partner to trust that I've got this. She's 24 years old, she's positioned herself to start into a 100k/year career. She has made decisions about that and taken some risks to get there.

Do you respect her judgement? Do you not trust her to figure out her next step?

If you end the relationship - are you expecting her to go under, find a sugar daddy to pay this off? What do you envision?

I would think she'd get her job, live at the equivalent of a 40-50k earner for a few years, advance in her career, and at 34 - or earlier - be free and clear. Likely with a high NW in her retirement accounts.

martyconlonontherun

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Re: SO with piles of debt?
« Reply #26 on: September 22, 2019, 07:35:45 AM »
Sounds like she is a good stock to purchase. Well educated and decent lifestyle where she will be able to pay of the debt by her mid thirties. In 20 years when you retire, are you really going to care if your net worth is 2m or 1.8m...... will you care more that you have someone you love?

ctuser1

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Re: SO with piles of debt?
« Reply #27 on: September 22, 2019, 08:42:45 AM »
At 27, I can imagine that a $200k hole may see very deep. I can assure you the hole itself is the least of your problem!! Average families take much bigger decisions routinely without ever thinking.

1. SO deciding to stay at home after a kid is born.
2. Spending $1000/mo in groceries instead of $350 (I and wifey were guilty of this for a decade+).
3. Mindless spending.
4. Failing to plan for foreseeable "emergencies" (kids college, parents requiring financial help when they are a really old etc).

All of these decisions are worth a much bigger $$ amount, with #1 and #3 being an order of magnitude bigger when you take the magic of compounding!!

On the other hand $200k debt may become an unsurmountable mountain if you let compounding work against you there.

You need to focus on the real important stuff here:
- Is she really a mustachian? Just "tendencies" are likely not sufficient with a large debt.
- Does she really have a feasible plan to get a 6-figure job? Nurse practitioners likely make that much. Nurse anesthesiologists make a lot more. Other types of nurses - hmmmm, sounds like a stretch!! If she is currently not on a path to go to a high paying sub-specialty, what's her plan to get there? Does it involve more debt? It is not a deal breaker if she does not have a plan down pat, but as long as she is open to putting in the effort, you should be good!!
- Are you really a mustachian? Again, tendencies don't suffice.
- Are you willing to tackle this as a joint problem?
- Is she willing to prioritize the debt issue sufficiently high so as to forego other "normal stuff" that many of her friends will try to fill her head with?

Focus on these real important issues that are really expensive if handled wrong. Don't sweat the relatively smaller stuff like the immediate debt. 

ReadySetMillionaire

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Re: SO with piles of debt?
« Reply #28 on: September 23, 2019, 08:41:26 AM »
Sure, it's a huge sum of money, but that could be taken care of within 4 years..IF there is a plan... what has me more concerned:
My (27M) current girlfriend (24F) of 2 years went to college, graduated, and then decided to go to graduate nursing school. 

She graduated (presumably with not insignificant debt) and then decided to go (directly?!?) into graduate nursing school, incurring more debt.

At the age of 22, she should have been well able to realize that she needed to pay off her undergrad student loans before incurring more large debt, especially if the curent loans had interest growing on them.  Aren't you scared to marry someone who would willingly pony up to more, huge, debt before paying off existing debt?  Someone who made that choice only 2 years ago?

IMO, you only go into grad school (in a normal, single person, age 22 situation), debt free, or with subsidies for grad studies to ensure no more debt is created.

If not - you go to work for 2-3 years first, pay off as much as you can, then go to grad school.   Please tell me I have it wrong, that she had virtually no undergrad debt and incurred $200k of debt in grad school alone (gasp, private school?).

If not -- what has dramatically changed in her outlook over the past 2 years?  I would give her a year of proving that change (by paying down a lot of debt), and then marry her.

Don't want to derail the thread, but I cannot emphasize enough how emphatically I disagree with this opinion, and that it is far more nuanced than what was presented in this post. 

This post is completely blind to opportunity cost and lost income.  I personally had about $60k undergrad debt, and at age 22, and assuming I was able to get a job, it would have taken me 2-3 years to pay that off if I were paying them as aggressively as possible.  It then would have taken me 2-3 years to save for law school. I then would not have started law school until 28, would not have graduated until 32, and then would have spent 3.5 years at my first job earning about $50k, and then not gone solo until 34 or 35.

Instead, I went to grad school right away and incurred $100k more debt (total of $160k).  Seems dumb, but my career got started way sooner. I was at my first firm at 26, I started my own practice when I was 29.  I am now earning $120k-plus (net) per year. I can pay off my loans very, very easily within a year or two. If I waited, I would just be graduating law school. With no debt, maybe, but income trumps debt 100 times out of 100.

As a reminder, a 20 yr student loan at 200k is around $1,300/mo (not an invitation to start a political discussion about parental responsibility to lead their 18 year old child down this path, but, alas...).  Since I do not have a high source of income, is it not irresponsible for me to overlook this topic? Is it my fault for not having a higher source of income?

Honestly, if this were my spouse, and she had $200k in loans, and my income was low, I would be working nights at a local FedEx distributor/driving for Uber/whatever. I'd crush them with her. 

It sounds like you like your SO the same way. Make a plan -- together. Show her that you're in this together. 

If you put your dual incomes together, this loan will be gone in 5-10 years. Yes, $200k is a lot of money, but it's not a big deal in the grand scheme of things.

economista

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Re: SO with piles of debt?
« Reply #29 on: September 23, 2019, 02:26:20 PM »
Note - This is like the 3rd or 4th time I've seen a post similar to this in the past few months and each time I think about posting and I don't. This time I will.

I will just point out my story to give another perspective on the issue. In my marriage I'm the one who came into it with a lot of debt. I had $115k in student loans after graduating from grad school. My (future) husband could have easily walked away when he found out but I had a plan to pay it off, I felt extremely justified in my decision to take out those loans, and I was very financially intelligent overall. When we got married we agreed that we are a team and all of our finances are fully combined. He is fully disabled (blind) and doesn't have any income outside of social security (this situation changed slightly over the past few years years but he has never had much income). I could resent the fact that he doesn't contribute very much toward our family income, he could resent that our standard of living is lower because I'm paying so much toward student loan payments, but we have a strong mature relationship and we are a team. We have family resources and family expenses and family goals and we work together, regardless of who is "giving to" or "pulling from" the pot more. From the day we got married, WE had student loan payments just like WE have a mortgage and WE have to buy groceries and food and on and on.

Until there is a change in the education system in our country many people, particularly students with parents like mine who contributed $0 toward my education or living expenses, or anything after graduating from high school, will have to take out loans to go to school. In many professions the increased income potential earned by the degree more than offsets the cost of the student loans and even taking out 6-figure loans is the correct financial decision in the long run (yes, even when they are so you can go directly to grad school - I'm REALLY glad I went directly to grad school).

*Stepping off my soap box*

mm1970

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Re: SO with piles of debt?
« Reply #30 on: September 23, 2019, 02:57:33 PM »
It's not ideal, but it could be worse.  A few back of the envelope calculations show she borrowed 2x too much.
Total loans: $210,000
Monthly loan payment: $2227
Expected income: $90,000
% of income towards loans: 29.7%
(Should be approx 15%)

But...it's do-able, as long as she doesn't spend money on stupid shit.  Like meals out, cars, and clothes.

mistymoney

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Re: SO with piles of debt?
« Reply #31 on: September 24, 2019, 06:32:45 AM »
Sure, it's a huge sum of money, but that could be taken care of within 4 years..IF there is a plan... what has me more concerned:
My (27M) current girlfriend (24F) of 2 years went to college, graduated, and then decided to go to graduate nursing school. 

She graduated (presumably with not insignificant debt) and then decided to go (directly?!?) into graduate nursing school, incurring more debt.

At the age of 22, she should have been well able to realize that she needed to pay off her undergrad student loans before incurring more large debt, especially if the curent loans had interest growing on them.  Aren't you scared to marry someone who would willingly pony up to more, huge, debt before paying off existing debt?  Someone who made that choice only 2 years ago?

IMO, you only go into grad school (in a normal, single person, age 22 situation), debt free, or with subsidies for grad studies to ensure no more debt is created.

If not - you go to work for 2-3 years first, pay off as much as you can, then go to grad school.   Please tell me I have it wrong, that she had virtually no undergrad debt and incurred $200k of debt in grad school alone (gasp, private school?).

If not -- what has dramatically changed in her outlook over the past 2 years?  I would give her a year of proving that change (by paying down a lot of debt), and then marry her.

Don't want to derail the thread, but I cannot emphasize enough how emphatically I disagree with this opinion, and that it is far more nuanced than what was presented in this post. 

This post is completely blind to opportunity cost and lost income.  I personally had about $60k undergrad debt, and at age 22, and assuming I was able to get a job, it would have taken me 2-3 years to pay that off if I were paying them as aggressively as possible.  It then would have taken me 2-3 years to save for law school. I then would not have started law school until 28, would not have graduated until 32, and then would have spent 3.5 years at my first job earning about $50k, and then not gone solo until 34 or 35.

Instead, I went to grad school right away and incurred $100k more debt (total of $160k).  Seems dumb, but my career got started way sooner. I was at my first firm at 26, I started my own practice when I was 29.  I am now earning $120k-plus (net) per year. I can pay off my loans very, very easily within a year or two. If I waited, I would just be graduating law school. With no debt, maybe, but income trumps debt 100 times out of 100.

As a reminder, a 20 yr student loan at 200k is around $1,300/mo (not an invitation to start a political discussion about parental responsibility to lead their 18 year old child down this path, but, alas...).  Since I do not have a high source of income, is it not irresponsible for me to overlook this topic? Is it my fault for not having a higher source of income?

Honestly, if this were my spouse, and she had $200k in loans, and my income was low, I would be working nights at a local FedEx distributor/driving for Uber/whatever. I'd crush them with her. 

It sounds like you like your SO the same way. Make a plan -- together. Show her that you're in this together. 

If you put your dual incomes together, this loan will be gone in 5-10 years. Yes, $200k is a lot of money, but it's not a big deal in the grand scheme of things.

100% agree, and you saved me the time of a long-winded post :)


Omy

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Re: SO with piles of debt?
« Reply #32 on: September 24, 2019, 07:01:59 AM »
You are both so young. You don't have to make marriage decisions today. Take a few years and pound out the debt together if you are committed to her. Working as a team will build a solid foundation.

I paid off my first husband's student loan and credit card debt as soon as we married. He made lots of money during the 15 years we were together and we built a sizable nest egg. When we divorced, he agreed to reimburse me for the money I had given him in our early days - and then we split the rest 50-50. He didn't have to do that, but he recognized that I had zeroed out my net worth when we met so that we could start fresh.

stacheasaurus

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Re: SO with piles of debt?
« Reply #33 on: September 24, 2019, 07:26:54 AM »
Love all of the discussion here!

Honestly, everyone is giving me heaps of confidence about my perceived size of this problem, and I really appreciate it.

Thanks!

Evildunk99

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Re: SO with piles of debt?
« Reply #34 on: September 24, 2019, 08:09:23 AM »
Your situation sounds familiar.  When my wife (also a nurse) & I were still dating, she shared her student debt situation with me while I was driving, and I was in so much shock that I ran a stop sign lol.   We eventually talked about what sacrifices we'd have to make to climb out of the hole and reach a secure financial footing. 

What worked for us, was that I would pay 100% of our fixed expenses (housing, utilities, health care), and she would buy some variable expenses like food /entertainment while focusing on paying down the debt.  The good thing about this approach is that it a) allows her to not stress about recurring bills, and b) motivates her to keep her careless spending in check because she knows it will extend the debt payoff timeline.

A couple things I've learned since then (~5 years):  nurses are in HIGH demand, especially in the south and southwest where populations are increasing the fastest.  We live in the Philly area, and routinely receive nursing job offers in the mail promising $40k signing bonuses to work in places like Yuma, AZ or rural Florida.  Another thing I've learned, is that nursing has a fair amount of flexibility and a wide-range of career paths.  She has been able to switch from full-time to part-time, and even per-diem to accommodate her grad school schedule and now watching our newborn.  Sticking to our plan, we've been able to reduce her six-figure debt by about 50% and can see light at the end of the tunnel in about 4-5 years!  It is possible!  GL

Padonak

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Re: SO with piles of debt?
« Reply #35 on: September 24, 2019, 08:41:44 AM »
Dude, Run!

trollwithamustache

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Re: SO with piles of debt?
« Reply #36 on: September 24, 2019, 09:28:27 AM »
let it ride for a year. 210k is both a lot and not a lot.  Does she make all her payments and still put a few bucks in the IRA/401k? Is OT money spent or does a good chunk of it go to extra payments?  At your age the general habits matter far more than the balance in 1 401k account or debt in another. the habits will multiply in their effect over the coming decades.

SKL-HOU

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Re: SO with piles of debt?
« Reply #37 on: September 24, 2019, 10:43:42 AM »

mm1970

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Re: SO with piles of debt?
« Reply #38 on: September 24, 2019, 10:56:29 AM »
Love all of the discussion here!

Honestly, everyone is giving me heaps of confidence about my perceived size of this problem, and I really appreciate it.

Thanks!
also, I have a good friend who is a nurse.  She's old like me (late 40s), but last year she made $180,000.

There can be big bucks in it if you know how to work it.

Lady SA

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Re: SO with piles of debt?
« Reply #39 on: September 24, 2019, 11:03:06 AM »
I married my DH, who came into the marriage with $120k in debt. We got married right out of college, so we were 22, with a combined SL load of $150k. When we first got married, I was also the higher income earner, as well.

Looking at my then-fiance's debt bills was horrifying, scary, and gave me a LOT of pause. BUT I tried to be objective about the situation, and I knew that he had made a tradeoff to launch himself into a lucrative career. And for the early years, the debt would be front-of-mind and very annoying, but with his future income, we would clear it pretty quickly and really accelerate our savings. He also had a plan to 1) increase his income and 2) pay the debt off aggressively and wasn't just going to ignore it. That was important to me, that he understood the scope of the problem and was planning on solving it in a reasonable manner.

I also thought about 10 years in the future, after the debt was gone. Is this the man I want by my side as we build a family, grow old together? He was (and is) my best friend and I couldn't imagine any one else being my life partner. In the end, I decided that the debt was scary, but people have mortgages way larger (to help scale the issue more accurately in my head) and I knew he had made the best decisions he could with the choices he had available to him.

So we decided to get married, combine finances, refinance as many loans we could to lower interest rates (much easier when married/combined income!), and tackle the debt together. We used the avalanche method and I immediately felt better knowing we had a solid solution and we had agreed on our approach together. And after we made our plan and auto bill pay was set, it just... faded into the background. That looming monster that I was so worried about just simply became minor background noise and never really interfered. We simply intentionally lived on the money that was left over after our payment and never really noticed when the (huge) payment went out.

We were really cognizant of trying to defuse any resentment that the debt caused, with him at first having a lower income than me and like 4x the debt load. But now, 5 years later, the debt is completely gone, and he has blown me out of the water income-wise, and we have a combined yearly income of over $250k, and honestly? The debt really didn't affect our relationship as much as I was worried about in the beginning. His education was absolutely worth every penny. And in the grand scale of life that I plan to spend with him, 5 years of dealing with this debt is just a tiny blip. Was it painful for those few years paying it back? Of course it was, I'm not gonna lie. But now we are over the hump, I would absolutely 100% do it again because marrying this smart, dependable man in particular is absolutely worth whatever I could pay. Honestly, I feel like paying $120k for the privilege of spending my life with him is a fantastic deal and I came out ahead. :)
« Last Edit: September 24, 2019, 11:26:03 AM by Lady SA »

Proud Foot

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Re: SO with piles of debt?
« Reply #40 on: September 24, 2019, 11:44:52 AM »
Sure, it's a huge sum of money, but that could be taken care of within 4 years..IF there is a plan... what has me more concerned:
My (27M) current girlfriend (24F) of 2 years went to college, graduated, and then decided to go to graduate nursing school. 

She graduated (presumably with not insignificant debt) and then decided to go (directly?!?) into graduate nursing school, incurring more debt.

At the age of 22, she should have been well able to realize that she needed to pay off her undergrad student loans before incurring more large debt, especially if the curent loans had interest growing on them.  Aren't you scared to marry someone who would willingly pony up to more, huge, debt before paying off existing debt?  Someone who made that choice only 2 years ago?

IMO, you only go into grad school (in a normal, single person, age 22 situation), debt free, or with subsidies for grad studies to ensure no more debt is created.

If not - you go to work for 2-3 years first, pay off as much as you can, then go to grad school.   Please tell me I have it wrong, that she had virtually no undergrad debt and incurred $200k of debt in grad school alone (gasp, private school?).

If not -- what has dramatically changed in her outlook over the past 2 years?  I would give her a year of proving that change (by paying down a lot of debt), and then marry her.

Don't want to derail the thread, but I cannot emphasize enough how emphatically I disagree with this opinion, and that it is far more nuanced than what was presented in this post. 

This post is completely blind to opportunity cost and lost income.  I personally had about $60k undergrad debt, and at age 22, and assuming I was able to get a job, it would have taken me 2-3 years to pay that off if I were paying them as aggressively as possible.  It then would have taken me 2-3 years to save for law school. I then would not have started law school until 28, would not have graduated until 32, and then would have spent 3.5 years at my first job earning about $50k, and then not gone solo until 34 or 35.

Instead, I went to grad school right away and incurred $100k more debt (total of $160k).  Seems dumb, but my career got started way sooner. I was at my first firm at 26, I started my own practice when I was 29.  I am now earning $120k-plus (net) per year. I can pay off my loans very, very easily within a year or two. If I waited, I would just be graduating law school. With no debt, maybe, but income trumps debt 100 times out of 100.


I agree with what you are saying above RSM, there is a lot of nuance that needs to be considered. However, for the situation the OP described I agree with Goldilocks. Graduating with a Bachelors degree in nursing can get you a job as an RN starting somewhere in the $55-70k range depending upon department and location. For a PA, Lawyer, or Doctor it makes sense to go to directly to graduate school immediately after graduating from undergrad because of the huge difference in income potential.

OP, I think the biggest thing you need to have figured out with your girlfriend is what her plan is to get these loans paid off. Will she just do her normal shifts or will she hit it hard and cover extra shifts, work nights/weekends, etc to knock out these loans in 3 years? I think the most important thing is how you phrase it when you talk with her and the language you use. Think of your outlook on the relationship if there were no debts. Also you mentioned you only having a low income, if you are talking with her about marriage/kids then this is even more important to discuss and have a plan. Explain your uneasiness about the high debt and you wanting to get it eliminated quickly to remove the necessity of you both having to work full time once you start having kids.

What kind of work will she be doing? Will she be working as a mid-level provider in an office setting or the ER? Or will she be working as an RN. Working as a mid-level will give her a lot higher earning potential than as an RN.

ReadySetMillionaire

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Re: SO with piles of debt?
« Reply #41 on: September 24, 2019, 06:15:04 PM »
I agree with what you are saying above RSM, there is a lot of nuance that needs to be considered. However, for the situation the OP described I agree with Goldilocks. Graduating with a Bachelors degree in nursing can get you a job as an RN starting somewhere in the $55-70k range depending upon department and location. For a PA, Lawyer, or Doctor it makes sense to go to directly to graduate school immediately after graduating from undergrad because of the huge difference in income potential.

OP, I think the biggest thing you need to have figured out with your girlfriend is what her plan is to get these loans paid off. Will she just do her normal shifts or will she hit it hard and cover extra shifts, work nights/weekends, etc to knock out these loans in 3 years? I think the most important thing is how you phrase it when you talk with her and the language you use. Think of your outlook on the relationship if there were no debts. Also you mentioned you only having a low income, if you are talking with her about marriage/kids then this is even more important to discuss and have a plan. Explain your uneasiness about the high debt and you wanting to get it eliminated quickly to remove the necessity of you both having to work full time once you start having kids.

What kind of work will she be doing? Will she be working as a mid-level provider in an office setting or the ER? Or will she be working as an RN. Working as a mid-level will give her a lot higher earning potential than as an RN.

I agree with everything you're saying as well.  My only objection was the blanket advice.  In some careers it does not make sense to wait; for others, it does not.

Going back to my example, if I waited to pay off my debt, my total income would have been roughly $400k by 35 (3-4 years of a bachelors-type career and three years as a beginning lawyer).  By going straight to law school, my total income will probably be about $750k (three years as a beginning lawyer, five years as a solo making six figures).  Going straight into grad school was a no-brainer.

Again, there's nuance in this.

And circling back to OP, there's nuance in her debt number. Is there a plan to pay them off? Is she otherwise financially responsible? Lots to think about it. But going back to my original post in this thread -- your love and compatibility is most important.

Goldielocks

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Re: SO with piles of debt?
« Reply #42 on: September 26, 2019, 01:06:08 AM »
Sure, it's a huge sum of money, but that could be taken care of within 4 years..IF there is a plan... what has me more concerned:
My (27M) current girlfriend (24F) of 2 years went to college, graduated, and then decided to go to graduate nursing school. 

She graduated (presumably with not insignificant debt) and then decided to go (directly?!?) into graduate nursing school, incurring more debt.

At the age of 22, she should have been well able to realize that she needed to pay off her undergrad student loans before incurring more large debt, especially if the curent loans had interest growing on them. 

Aren't you scared to marry someone who would willingly pony up to more, huge, debt before paying off existing debt?  ...
...
 - you go to work for 2-3 years first, pay off as much as you can, then go to grad school. 

Don't want to derail the thread, but I cannot emphasize enough how emphatically I disagree with this opinion, and that it is far more nuanced than what was presented in this post. 

This post is completely blind to opportunity cost and lost income. I personally had about $60k undergrad debt, and at age 22, and assuming I was able to get a job, it would have taken me 2-3 years to pay that off if I were paying them as aggressively as possible.  It then would have taken me 2-3 years to save for law school. I then would not have started law school until 28, would not have graduated until 32, and then would have spent 3.5 years at my first job earning about $50k, and then not gone solo until 34 or 35.

Instead, I went to grad school right away and incurred $100k more debt (total of $160k).  Seems dumb, but my career got started way sooner. I was at my first firm at 26, I started my own practice when I was 29.  I am now earning $120k-plus (net) per year. I can pay off my loans very, very easily within a year or two. If I waited, I would just be graduating law school. With no debt, maybe, but income trumps debt 100 times out of 100.

Millionaire --

Taking 2-3 years to pay off most of your undergrad debt before going to grad school is the best choice for nearly all "typical" situations.
a)  The money differential of income before / after is not that large, especially when interest-bearing loans are considered.
b) Many people don't really know what "the working world" is like... they may end up hating an office job (or research lab job)
c)  Work experience helps add a lot of insight to your grad studies - deepens understanding
d)  It is actually a harder decision -- sometimes peers, family, professors and your own fear of the unknown is what makes people "fall" into grad school.   Deciding to go to grad school after 2 years of working sharpens your focus about what you are getting from grad school.
e) Once you start working, you can identify a lot of ways to take school part time while keep working, because this suddenly seems like a real option that did not present itself while you were a FT student.
f) More likely to get hired after grad school if you have some career work experience (at something) under your belt.

But mostly -- Millionaire, you were taking a large if hopefully calculated risk -- a risk that does not pay off in income (or sometimes even finishing grad school) for many people.   This is due to personal, health, family, interest, available work on graduation -- a huge number of factors can derail someone's grad school success potential.

Millionaire -- I am glad it worked for you... I do hope that you did not end up with $200k of loans, either.   

It takes some real head in the sand blindness or brass balls to knowingly jump into $200k of loans when you could pause at $50k and work them off a bit first, get your debts under control.

NOTE
This thread is on the MMM site.   Is anyone surprised that I posted that someone with a lot of loans should work to pay them off (or partially) using their new degree before leaping into a much larger loan scenario with no guarantees of high(er) paid work at the end?

@economista - This is not posted about you...I have seen your rationale and postings elsewhere, and you may have been one of the cases where it makes sense, but you were also exceptionally sensible and worked very hard to keep your total loans quite low, all things considered.

charis

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Re: SO with piles of debt?
« Reply #43 on: September 26, 2019, 08:07:01 AM »
I have to agree with Goldilocks. I worked for two years (working two day/night jobs) after undergrad to pay off my loans before proceeding to grad school.  Granted, I did not have $50k, and if I did, I probably couldn't have done it in two years on the $11/$8 an hour that I was making. 

But working to pay debt during that time gave me some very valuable perspective on $$, location, working during grad school, applying to a lower-cost state program, and trying to keep my borrowing as limited as possible during grad school. 

I see a lot of students with limited working/life experience borrowing the max with little thought to how it will affect their future selves.  $200k in loans for a nurse strikes me a lot - RSM had less in loans after law school.  So it's a red flag.  But again, the size of the issue depends on one's personal circumstances.

ReadySetMillionaire

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Re: SO with piles of debt?
« Reply #44 on: September 27, 2019, 09:26:49 AM »
@Goldielocks and @charis -- I do not necessarily disagree with you.  Paying off undergrad debt may be the right move for many people.

I'm just pointing out the fact that the original proposition (a blanket recommendation to pay off undergrad before grad school, without any exceptions) lacked nuance and the proper analysis regarding opportunity cost.

Goldielocks

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Re: SO with piles of debt?
« Reply #45 on: September 27, 2019, 05:10:05 PM »
@Goldielocks and @charis -- I do not necessarily disagree with you.  Paying off undergrad debt may be the right move for many people.

I'm just pointing out the fact that the original proposition (a blanket recommendation to pay off undergrad before grad school, without any exceptions) lacked nuance and the proper analysis regarding opportunity cost.
Ah! But it did involve a strong assessment of risk.
Engineering project analysis typically discounts potential opportunity costs by a quantitative risk factor.

:-)

Just for Fun... approximate calculations below!  Not intended to be technically accurate...


e.g.   
Opportunity value to earn $100k/yr instead of $50k/yr 2 years earlier (assumes will take off 2 years for grad school either way)
Opportunity is to earn $100k x 0.9 (you pay more taxes at $100k than $50k) more total gross income 2 years earlier versus a 2 yr delay:

$90k extra income x 0.6 risk factor = $56,000 value of potential opportunity.  NOTE -- I am assuming here that 60% of people who enter the program graduate from the program in 2 years with a $100k job immediately after graduation.

Cost of the interest on undergrad loan:
Minus growth of 5% interest on $50k loans.... which will be carried until all $170k is paid off in 12 years (10 years from time of graduating grad school).. FV =(-$40k)

Total value of entering grad school immediately versus 2 more years future, adjusted for risk:  $16k.

IMO, this is getting to be a pretty small benefit.   A person entering grad studies after working 2 years would reasonably be able to find more than this amount in reduced loans.  They may even qualify for increased bursaries/ scholarships based on need if they now become "independent" students where parental income does not apply.
« Last Edit: September 27, 2019, 05:25:35 PM by Goldielocks »