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My partner is about to start Veterinary School, and as a result is going to be taking on a potentially very large amount of debt. I have a job currently paying me $55,000 on salary (factoring in the insurance cost, income tax, rent, general expense, and retirement contributions etc. I am left with ~$1,000 per month that is available for anything else. Normally this just goes into savings or investments, perhaps a nice night out or weekend camping trip).

As a result of their schooling demands, the amount of work that my partner will be able to do while attending school is little to none. During the Summer months, they will likely be able to work a full time, temporary position earning roughly $2,000 per month after taxes.

Schooling is estimated to cost about $37,000 per year or about $150,000 total, so I know we will need to take out (several) loans to cover the cost.


My question(s), numbered for answer clarity, are:

(1) how much of our ~$3,000 "leftover" per month in the summer, and ~$1,000 during the school year, should we be using to directly pay tuition vs saving/investing/doing other things with it? Is it really worth dumping everything into paying it all without taking any loans?

NOTE: I already have a ~$10,000 safety net in place in my savings for emergencies only, and if need be I can also fairly easily pull an extra $500 a month from being invested in a Roth IRA that I currently have in place.


Bonus (curiosity?) Questions:

(2) I don't have much experience in taking on student loans myself - are they taken out in a lump sum? (i.e. all ~$150,000 at once to pay all of tuition) Or is it more of a semester to semester basis, resulting in potentially varied interest rates that might complicate this calculation further?

(3) We are also looking to buy a home (hopefully after the market swings a little more in the buyer's favor) in the next few years if possible, maybe even while there is still a year left of their schooling. Is taking on a mortgage while also having student debt a wise thing to do? (or perhaps just not necessarily "unwise?") Is it even a possibility to consider saving up for a down payment on a home while also paying off student loan debt?

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    You're planning on paying for a non-spouse's education. "Danger, Will Robinson!"
    – RonJohn
    Jul 15 at 15:57
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    @RonJohn Lol! we are planning to make that transition soon, but for financial aid reasons its better that they remain single in school. At least that's what we think...not to mention marriage and a wedding are a whole new expense to add in to the equation. We have been in a serious relationship together for a little over 7.5 years , and we've been living together for about 6 months now, and have every intention to "tie the knot" in the future. I'd like to think I'm pretty safe from the danger you mention, but I suppose it is still a very important thing to consider. Thanks for your concern!
    – Flats
    Jul 15 at 16:10
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    It costs less than $100 to get married.
    – RonJohn
    Jul 15 at 16:59
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    My ex-wife and I were married at my Uncle's house. After the "ceremony", we all ate and had a wonderful time. Cost? Peanuts.
    – RonJohn
    Jul 15 at 20:56
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    Starting that statement with 'my ex-wife' adds some unintentional humor.
    – Brady Gilg
    Jul 16 at 16:56
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I do this sort of thing with spreadsheets. You'll know what the interest rate and compounding schedule of the loans are, and so you can calculate exactly how much you'll pay to borrow that money.

Then you can test out the impact of allocating extra money to paying expenses directly rather than taking the loan, or different amounts of money used to repay the loan versus other investments you might make, etc.

As for your specific questions:

  1. I think it is worth paying directly where possible. Debt is fairly expensive and can be a pain to carry. The major question is what else would you do with the money if not paying school costs? If you'd spend it on vacations and dining out I'd say it would be better to pay it against tuition. Borrowing money costs money, so it's important to think about what you're really paying for with that extra cost. Paying my way through graduate school was hard, but I loved being debt free when I was done.

  2. It depends on the specifics of the loan(s) you take out. You'll have to consult the loan agreements.

  3. Spending money on things leaves less money to spend on other things. As above, taking out debt costs more money than paying expenses directly would, which means even less money to spend on other things. Having student loan debt will make it harder to get a mortgage, and may increase the amount of interest you have to pay. Being more leveraged is riskier than being less leveraged.

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  • I will definitely have to get a spreadsheet set up to have a more visual guide, good suggestion. You mention that having student loan debt will make it difficult to get a mortgage, will it make it impossible? For example will we need to wait to buy a home until after all of the loans are paid off? Also, wouldn't having a larger down payment for a home saved up lead to a more likely acceptance for a mortgage?
    – Flats
    Jul 15 at 17:02
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    @Flats It depends on your overall financial situation, but I would be surprised if having student loan debt made it impossible to get a mortgage. It might lead to a worse mortgage though (like a higher interest rate than you might otherwise get). A larger down payment is nice, but a mortgage issuer is going to look at how easily you can repay your debt to them. Larger down payment = smaller loan amount, but student debt payments = less money available to pay the mortgage each month. And they know if things get hard, you can walk away from the mortgage but (usually) not the student loans.
    – Upper_Case
    Jul 15 at 17:07
  • so perhaps a smaller overall loan amount in tandem with the history of responsibly paying down those student loans on time (or faster) would even be beneficial to obtaining a slightly better mortgage deal? Also, how exactly does one "walk away from" a mortgage? You're still obligated to pay it back just like the student loans right?
    – Flats
    Jul 15 at 17:12
  • @Flats You can declare bankruptcy and discharge mortgage debt, or just stop paying and deal with a foreclosure (with other consequences). For many student loans there is no way to escape them, ever. And a mortgage issuer will sort of care about debt payment history (usually represented by your credit score), but they will also care (a lot) about your outstanding debts. Having less outstanding debt is better for you when seeking a mortgage, full stop. And, as above, loans cost money; it will be easier to service a mortgage without required payments on other debts each month.
    – Upper_Case
    Jul 15 at 17:18
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  1. All of your 'extra' money should be directed toward debt-reduction before investments (unless you get company matching). Since you aren't married yet, you should be be setting aside all this money to pay off your student loans immediately after you get married. Don't pay for your partners eduction directly. Allow them to pay for it themselves via loans or whatnot for now, which become your loans after you get married and you can pay them off from savings.

Also, I hope you and your future spouse have a realistic idea of the financial implications of vet school. The cost to future income ratio is not awesome. https://www.whitecoatinvestor.com/veterinarian-student-loan-debt/

  1. Don't be in a big rush to buy a house. It's less about finances (but of course that should be healthy first), and more about when you're ready to settle down in a location. And definitely do not buy a house with someone you're not married to.
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  • Never really thought of doing it that way, thanks for the answer. We are (unfortunately) well aware of the financial woes in the future of most vets, but my partner figures that having a job isn't just about making money, there's a mental portion to it as well, and it has to fit your personality. I tend to agree, however, I'd rather work a job that doesn't fit me perfectly if it means that I'll get to be retired and done working sooner. Luckily for them, I'm also okay with helping out on the debt that they'll get. (though now it seems to be a good idea to wait till they're actually my spouse)
    – Flats
    Jul 16 at 18:11
  • Glad to hear you're both approaching with eyes wide open. They're right - it's not all about money (but I'm with you on the FI first, then do what whatever I want.). Congrats on your future!
    – Michael
    Jul 16 at 20:57
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If I were married, and my spouse was planning on going to Vet School, then we would allocate that $1000/month year-round income and $2000/month summer income to tuition, books, lab fees, etc (aka "school stuff").

As far as when to borrow money: only when necessary and only as must as necessary: $1,000/month for four years, plus $2000/month for three 3-month summers (presuming that my spouse would get a job after graduation) is $66,000. Thus, we'd "only" need about $90,000 in loans.

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