Wow, what an awesome opportunity. I can’t imagine COL being so high as to wipe out a $65k pay bump plus free housing. If your GF buckles down she can wipe out all her SL in 3 years with this move. No need for PSLF. I’d also consider 3 years in Alaska together an adventure. If your relationship survives such a drastic change, I’d say you’ll be set for the long haul. This is what I would do.
You - max your 401k, IRA, and HSA (if applicable). This is your oxygen mask. Then consider the free rent you’re eligible for via GF in exchange for you picking up all joint household expenses (groceries, utilities, occasional outings, etc.). This allows GF to use almost all income towards SL.
GF - puts in 5% 401k to get match, picks cheapest insurance avail.
She should sign up for PAYE federal SL repayment plan (she has all direct loans for fed loans, right?) to keep fed payments low, while knocking out the private loans first. She should also fill out the employer cert annually for PSLF (just in case things don’t work out).
- the rationale for private first is that her 20k loan benefit is only for federal loans, so makes sense to let that pay off fed loans instead. Plus fed loans are more flexible than private ones.
So 110k - 26k taxes - 5500 401k - 7500 fed loan min payments (est) - 3k insurance (est) = 68k - 1k flights - 3000 personal allowance* = 64k to private loans.
- Does she have to put into the fed pension? I’m required to put in like 4.5%, so that’s something to consider when estimating numbers. (If she doesn’t stay to 5 year vest, she can cash out her contributions when leaving.) But I don’t know how IHS works, if they put into fed pension.
Year 1
133 - 64k + 7k interest (est) = 76k private
100 fed (min payments should mostly cover interest)
Year 2
76 - 64k + 4K interest = 16k private
100 fed - 40k loan benefit = 60k fed
Year 3
16k +1k interest - 17k payment = 0 private
60k fed - 20k loan benefit - 40k extra payment = 0 fed
64 - 17k p - 40k f = 7k put in IRA or towards move costs back to lower 48.
This year I would make sure to leave 20k fed to be wiped out by loan benefit at end. Also, this year if you decide you love Alaska and want to stay longer, I would put the extra 40k payments towards retirement and/or start splitting costs, and let the loan benefit wipe out fed balance in next 2 years instead.
*personal allowance sounds patronizing in the context of you proposing it to her, but I mean it in the context of her setting her own allowance. Both my DH and I have “allowances.”