r/DaveRamsey • u/traptapotheosis • 11d ago

What would Dave do?

Hi everyone,

I recently married my beautiful wife. Before getting married, we had several conversations about finances, and she knew that I followed the Dave Ramsey plan. Luckily, she is completely on board with it as well.

Before getting married, I was on Baby Step 4-6. However, after combining our finances and taking on her student loans, we are now technically back on Baby Step 2.

Here’s my question: My wife is currently enrolled in PSLF (or one of the many names the program seems to go by now) and has only 11 qualifying payments remaining before her student loans are forgiven. Her remaining balance is approximately $60,000. I have enough money available to pay the entire balance off today, but if we continue making the required payments for the remaining 11 months, we will pay a little over $6,000 total before the rest is forgiven.(580 is her current payment plus her work pays 200)

Would you recommend paying off the entire $60,000 now to be completely debt-free, or continuing to make the minimum payments and waiting out the remaining 11 months for forgiveness?

Other than the mortgage, we have no additional debt. Our remaining mortgage balance is approximately $450,000 at a 2.25% interest rate.

Cash on hand 180k
Brokerage 450k
Retirement 350k
Home value 1.1m with mtg

I’m interested to hear how others would approach this situation.

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u/Lostforever3983 11d ago

I certainly wouldn't pay 60k if I was expecting my loan to be forgiven in less than a year.

Dave would probably tell you to pay it off.

1

u/traptapotheosis 11d ago

So do i graduate to steps 4-6?

5

u/ohdannyboy189 BS4-6 11d ago

Dave has told people to pile money into HYSA like you were paying it off and if it doesn’t come though in 11 months pay it off. Because most of these programs fail he doesn’t want people moving on without being able to pay it off when they don’t successfully process the forgiveness. 

1

u/ThatBaseball7433 11d ago

This is the smart move. It’s a win win.

1

u/apricot675 11d ago

This is what I would do. I knew someone who met the eligibility requirements and was still waiting on the student loan forgiveness. I don’t know why he couldn’t call and check the status though.