student loan repayment options

[janelikes]

Student Loan scenario:
Female, 30 year old married, Health Professional with 225,000 (6.8%) in debt. I own my own company doing health care. Last year I worked part-time (I was pregnant, I took care of my first kid the other days) and made around 50,000. I have the income potential of up to 150,000/yr but there is no guarantee as if I do not work, I do not get paid. However, I feel like I could reasonably make twice as much as I’m making now if I take on more clients.
My spouse and I currently file taxes separately and I am on income based repayment ($137 a month). This is because I had been working in a 42,000/year full time job that was eligible for PSLF.
We are thrifty - We live on a budget and stick to it pretty well. Right now we are able to save 30% of our income for debt reduction. For comparison sake, we spend 21% on part time childcare (3 days a week, 2 kids).

I need to make a decision about what I am going to do:

Option A: Continue to work and be filed separately from my spouse. Continue using IBR and put at least $200 a month in a brokerage account in order to pay income on the potential 400,000+ income tax bomb I will encounter in 20 years. I approximate I would need 200,000 saved for the tax man.

Option B: Pay student loans off rapidly. I could work full time with kids in day-care and put away anywhere from 2000-5000 a month towards loan repayment. This will get easier when kids go to school in 5 years. In order to not have my loan increase every year I need to pay down at least 1400 a month. The rest would go to principal. It could take between 4-10 years. I would stop investing in retirement if I did this (currently I’m trying to put away 10%).

Option C: This is an option I’m not interested in but I could go back into a full time job that pays badly that is eligible for PSLF. I would probably have to make a 60 minute commute. I would have to work there for 7 years. 

Thoughts?

Yes I know I have way too much debt and don’t make much money. The shame has occurred and now I’m looking for solutions.

[ShoulderThingThatGoesUp]

What’s the income/debt situation if you combine finances?

[therethere]

Unless being a partial SAHP is of high value to you, I would choose Option B but without stopping retirement savings. Pretty much follow the Investment Order. I would refinance the loans and continue to check on lower rates every 6 months as it gets paid down. If you're going full-time, I would max out retirement accounts if you can get your loans under 5.5% or so. For the tax savings and to get those gains accumulating. Otherwise, you'll look up at 35 or 40 and have nothing saved.

Really though you need to run some spreadsheet/calculators to fully assess the situation. The hardest part will be sticking to the plan and staying away from lifestyle inflation.

[ysette9]

I think the White Coat Investor blog has resources to help you figure out what to do with student loans. Without getting into detailed numbers I agree that I would do Option B in your case. I would hate to live with that hanging around my neck and making little or no progress on the balances. You are in a position financially to crank up the income and get rid of it. Just do it.