Question for the Money Doctors
Question submitted on Sep 12, 2013.
QuestionMy wife and i have over $100,000 in student loan debt to repay, but not the comensurate household income that one might expect from that expenditure. We''ve looked into occupations that offer some debt forgiveness, but haven''t had any luck.
In light of the fact that we currently have a mortgage, is it realistic to think tha we''ll be able to pay off such a large debt before we reach retirement age? (She''s 33 and I''m 31.) Should we resign ourselves to student loan payments being a permanent fixture in our lives?
I believe that anything is possible, especially when paying off debt. It just all depends on what lifestyle you choose to live (for a short season in your life).
If you are able to share in a short period of sacrifice, I think you can have that debt paid off in 5-7 years. Here is how:
On a $100,000 loan at 4.50% interest, if you pay $500 per month, the loan will be paid off in 30 years.  However, if can find an extra $1000 per month in your budget to pay against the loan by spending money only on what you NEED (i.e. house payment, utilities and food) versus what you WANT (car payments (beater used cars are cheap), smart phones, cable tv, internet, out to eat etc ), you could pay your loan off in 6 years.
Life is about choices.  If you choose to live like poor man for 6 years, you will enjoy the benefit of freeing up an extra $1500 of cash flow for the rest of your life.
If you need extra help or coaching, contact a CPA/PFS in your area by following this link http://apps.aicpa.org/credentialsrefweb/PFSCredentialSearchPage.aspx.
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