I’m kind of annoyed at how you wrote this post because all your questions are maths related, I.e. what’s the best way for your GF to get rid of her loans. But all the background info is completely unnecessary if that was your actual question. Which is why most people seemed to have focused on your implied question of should I break up with my GF. I’ll addresss both questions.
I’m biased because I have $240k in student loans, which wasn’t ever (as far as I know) a potential deal breaker in my relationship. My now DH then boyfriend watched me take on loans for grad school so he wasn’t exactly shocked at the end when I tallied it all up for loan consolidation. While I can see how you might be shocked, I think you’re over reacting. I frequently describe my loans to others as “over 100k.” Because it’s essentially a simple way to say they’re six figure. And I don’t think you had any right to know the exact balance until after you started discussing marriage with your GF. While I’m open and unashamed about mine, many people are more private due to cultural norms about their finances. So I feel like “hid” is an unfair description even if she kept it on the DL until now. If you said my DW just told me she has 210k in SL, well that would be a different matter. She told you exactly when she needed to.
I think the deadline to break up is a little weird, but understandable given her past experiences. She’s probably resigned to losing yet another SO due to her loans and wants the band-aid ripped off rather than suffering in the unknown state. Either way it sounds like you’re unsure and feel betrayed now, so why don’t you just hold off on the engagement part for now while you sort through mutual financial decisions?
The original post doesn’t say and I skimmed the rest, so sorry if I’m asking questions already answered. If you want the maths questions answered I think you need to provide more detail about your joint financial situation. And it would probably be best to start a new thread, maybe under case studies with the financial details minus all the drama. How much do you make? Are you living together yet? How have you handled joint expenses so far?
Something to note is that in most states debts premarriage do not become joint debts as long as the spouse doesn’t sign on to the account. If the accounts go in default creditors could come after joint property though. You’ll probably find this article insteresting and reassuring:
https://www.nolo.com/legal-encyclopedia/debt-marriage-owe-spouse-debts-29572.html Do some research into your state specific laws.
One strategy I’ve seen couples take, particularly where the lower earning spouse has the debt and wants to pay off their own debt, is for the higher earning spouse to pay for all the joint household expenses so the other spouse can use the vast majority of their income to throw at the debt. Is this a possibility for you guys? If you currently don’t live together, would moving in lower expenses enough that you could pay joint expenses without decreasing your savings rate too much? If so, she could knock out the loans in 5-6 years on her current income. If she’s successfully doing this for your say year pre-engagement and then maybe 1-2 year engagement, seems like you would probably be more comfortable with your future joint financial situation by the time you tied the knot. If she is not as mustachian as you outside of the loans, hearing that she could pay them off in that time frame might motivate her to become more focused on being frugal. It’s very easy to get hopeless about that level of debt when you know it will always follow you unlike someone else’s bad choices with cc debt. If you feel hopeless and that you’ll never get rid of them, then you start to think it doesn’t matter how you spend your money after meeting the minimums.
Re PSLF the most important factor isn’t really financial. Does your GF like this field of work, not just this job? She might feel horribly locked in if bosses change etc. And being on PSLF makes your balance grow so the longer you’re on it the more stuck you get. Is she reasonably certain she can maintain 10 years of public service employment elsewhere if something happens to this job? If she can’t answer yes to those questions then PSLF is not the way to go even if it’s maths speaking the best solution.
In terms of whether seeking a higher income in the private sector would be better, there’s two main considerations that you can’t really calculate. 1) In some fields the public interest sector is the only way to have any semblance of a work-life balance. If that’s the case for hers, would she be able to last long enough in high pressure, long hour settings to make the higher pay worthwhile? 2) Some fields don’t earn a whole lot in either the public or private sector. What’s the likelihood that she could find much higher paying private sector jobs with her degrees or skill set? Be realistic about this because $60k is a good salary. Not ideal compared to 210k in loans, but overall it’s certainly above average.
PSLF done right can be great for FIRE. Because if you start investing the difference between minimum income based payments and what your standard payment otherwise would be, it has ten years to grow. Meaning once the loans are gone you can have a nice stache. It also encourages you to put as much as possible into a 401k to lower income and thus the minimum payments. If you make a lot you would probably once married want to figure out if it makes more sense to file taxes separately to avoid your income being counted in your GF’s income calculations (there are tax consequences to this that you have to calculate).
In terms of how to calculate if PLSF makes sense, use the payment calculator on sudentaid.ed.gov to see what the estimated total amount your GF would pay after ten years. Decide how you guys would otherwise attack her loans and calculate how much you would pay (balance plus interest) that way. Compare the difference and see if it’s significant enough to have your GF commit to ten years of public service. The same goes for the 20-25 year forgiveness although for that you have to add in how much you would pay in taxes at forgiveness. I’m not sure if it that program ever works out as a huge benefit except for the most extreme cases.
Read up all you can about the PSLF program, studentaid.ed.gov and white coat investor are good places to start. It doesn’t sound like you really understand it, because you don’t get accepted into the program. You can ask for advisory opinions on if certain jobs qualify, but in general someone could work at a nonprofit for 10 years and then apply for forgiveness without ever having filed specific PSLF paperwork before then. Which leads to the next question. Does your GF have 6 months towards the program because she’s only ever worked nonprofit full time for last six months? Or are you basing it off when she submitted her first employment certification form saying she’s interested in PSLF? The months qualified isn’t calculated from when you submit the paperwork asking if your current job qualifies. If she had other nonprofit work and has been on a qualifying income based payment program she should see if she can get credit for those months as well. I’m guessing she’s been on the correct payment plan because with that high of loans and that level income, most people would naturally choose the income based plan.
If she’s decides to do PSLF for all the loans, she should try only consolidating the non qualifying loans so that the clock only starts over for those. I’m not sure if this is possible, but something to look into. Definitely have her do any consolidations before marriage if you’re in a community property state. That way the debt doesn’t become yours after consolidation.