Set a goal to pay off your debt

This is part 3 of 4 in my "Getting to Zero" series on paying off student loans.

“Most people overestimate what they can accomplish in a year and underestimate what they can achieve in a decade.”

Goal setting is vital if you want to tackle six figures of student loan debt. Without a clearly defined goal, you’re just hoping that somehow you’ll get out of debt at some uncertain point in the future. By setting a proper goal, you’ll be better able to track your progress, more accountable in sticking to your goal, and less likely to procrastinate when starting out.

Goals Should be Specific.

Your goal should be specific. For something like a student loan, you’ll want to be highly specific about the payoff date. Example: “Pay off all student loan debt before January 1, 2026.”

Goals Should be Ambitious.

It’s good to be ambitious when it comes to goal setting. There's a certain amount of tension that drives every action you make. When it comes to setting your goals, be sure there’s enough pressure so you feel compelled to take consistent action towards the goal each day. Make sure the goal is actually achievable though. Add supporting goals (described below) if you think your goal is feasible, but there are some big things that need to happen to get you there.

Set Milestones and Create Supporting Goals

If you’ve got a mountain of debt, and your payoff date is several years in the future, you should set some milestones in between. For instance, let’s say you owed $240,000 and are targeting a full payoff by January 1, 2026 like the example above. You might benefit from setting a milestone goal of, “Get loans balance below $200,000 before January 1, 2022.”

I also recommend setting other smaller financial goals that will help you reach your primary goal of paying off your student loans. Example: “Increase my income by $500 per month in the next 90 days.”

My Experience with Goal Setting

Being broke and shouldering a quarter million in debt created enormous pressure for me. I never felt comfortable. If I wasn't working, learning, and building, I was moving backwards. This isn't a hyperbole. My loans were negatively amortizing by $1600 per month. Once I started setting goals, I felt less like a victim to the debt and more in control with an ability to turn my situation around. As I worked harder and increased my income, I updated my goals with a new faster pay off date.  

Set Stretch Goals

When circumstances change, update your goals accordingly. If you have 5 years left to pay off the remaining debt under your original goal and you could conceivably do it within 2 years, you should go ahead and change the goal to 2 years out. Don’t let yourself get too comfortable.

My Experience setting Stretch Goals:

In the fall of 2018, I did something that felt absurd at the time. I set a goal of paying off my remaining $150k in student loans before the new decade. For the previous two years, I'd set some arbitrary goals that were 5-6 years out and I just threw whatever I could at my loans, but I lacked focus. My new goal was virtually insane, and it would take 15 months of paying over $10,000 per month.

I developed a laser focus around this goal and was hell-bent on knocking out my remaining student loans before 2020. There were months when it was extremely painful to transfer giant sums of income to pay off that debt. I listened to Dave Ramsey and other personal finance podcasts any time I was driving, to stay focused on my goal. This is why I recommend you listen to personal finance podcasts, subscribe to student loan newsletters, and read personal finance books when you have time. By continually filling your mind with this material, you’ll stay focused on your goal and discover ways to achieve it faster.

When my side business income exceeded my salaried income in June of 2019, I was tempted to leave my day job, but I knew there was no way to hit my goal without two sources of income. As my business continued to grow and represent a larger share of my net worth, I felt more and more pressure to give it as much attention as I could muster...nights, weekends, holidays, and any other spare time I had. As we were doing a big software rewrite last summer, I used all of my vacation days to push the release across the finish line.

It was all worth it when I zeroed out my student loans in August of 2019 – exactly 10 years after taking out that first law school loan and 4 months before my December 31st deadline. After years of feeling trapped and helpless, it's hard to describe the relief of suddenly being free from such a mountain of debt.

So What Are Your Repayment Options?

Your options are pretty simple. You can either get serious and create a plan to pay your loans down as soon as possible, or you can sign up for an income based repayment plan and hope your loans are forgiven in 10, 20, or 25 years from now. I wouldn’t suggest the latter.

Public Service Loan Forgiveness

If you’re in a job that qualifies for Public Service Loan Forgiveness (PSLF) your loan balance is forgiven once you've made 120 payments (10 years). BUT, it's critical that you do your research and make sure you qualify.

In 2019, only 1% of applicants qualified for PSLF.

This is the only forgiveness option I recommend, and even then, it may not make financial sense. It totally depends on your occupation and debt burden.

Good news, you aren't on the hook for taxes on the portion of your loans forgiven. Other forgiveness plans will have a tax bomb waiting for you in 20 years, which makes those plans much less desirable. Hence, it is imperative that you do your research.

Qualify based on your employer:

• Local Government, State Government, or Federal Government
• Non Profits. Make sure it's a valid 501(c)(3) Eligibility based on your employer, not what kind of job you do.
• Faith Leaders (as of August 2020)

Here's what you need to do to ensure you qualify

Go to the Federal Student Aid site and use the Public Service Loan Forgiveness help tool . This tool will walk you through a series of steps to help you figure out if you qualify and it will point you to the official forms you need to certify qualifying employment and apply for forgiveness.

Make sure you fill out this form. It will ensure that you're able to track your progress on the forgiveness track and will make it easier to apply for forgiveness after 10 years have lapsed.

Once you've submitted the Employment Certification Form, they will review your employment history and your existing loans to let you know if you qualify.

Income Driven Repayment Plans

For many, they sign up for an income based plan, set up auto debit payments, and forget about it. They're shocked to log in a year later to see the outstanding balance has grown by $10,000.

If you're in financial distress and unable to make payments any other way, then an income based plans will be your best option. They're certainly better than defaulting or putting loans into forbearance.

Whatever you do, don't get comfortable with the low monthly payment under these plans. If you do this, one day you're going to wake up, check your loans, and realize the balance has grown by $100,000 or more. The majority of loans will require the full 25-year plan before they qualify for forgiveness. Think about that. A quarter century of loans hanging over your head.

There are loan specialists out there who will point out that this can be a great deal once you consider inflation, salary, stock market returns, and a bunch of other factors. While that might be possible on paper, there are some huge risks and you're signing up for decades of emotional toil if you decide to go this route.

To benefit from these, you need to be okay making roughly the same you're making now with minor 2% - 3% salary bumps for the rest of your life. If you start your own business, get a big promotion and salary bump, or receive any kind of big income boost, you may be much worse off opting for one of these plans.

Also, you'll have to re-certify eligibility every single year for these plans. IF you don't, you automatically get reverted back to the standard 10 year repayment term and will be in for a shocking monthly payment amount if you're not prepared.

If you owe six figures in student loan debt, make it your goal to get out of these plans as quickly as possible. They will do more harm than good and probably send your loan into negative amortization.

Warning: A Tax Bomb will be Waiting For You

When qualifying for income based repayment plans, you'll be taxed on the forgiveness amount which will result in a massive tax bill. Think about it. If your loans have been growing every year for 25 years, it's possible that your balance could grow to $500,000 or more. An additional half million in income will push you into the highest tax bracket and you'll owe the IRS at least $200,000 if your balance has grown to $500k or more.

I could write an entire book comparing each of these and going over all the different scenarios where one might be better than the other, but the key takeaway is this: DO NOT SHACKLE YOURSELF WITH THESE PLANS FOR THE NEXT TWO DECADES.

Your ability to qualify for these plans and the required number of qualifying payments will vary based on when you took out your loan. There are a few of these, and some are better than others.

• Pay As You Earn Repayment Plan (PAYE) Revised
• Pay As You Earn Repayment Plan (REPAYE)
• Income Based Repayment Plan (IBR) Income
• Contingent Repayment Plan (ICR)

It may seem tempting now, but these will be a massive drag on your career earnings. The risks are simply too high when it comes to negative amortization and the tax obligations when these are forgiven.

Keep in mind that this is sort of a hopeless position to be in. If your income ever increases substantially, your payments will increase and an even larger amount of your total earnings will be devoted to servicing your loans.

Example:

Assume you start off with $200,000 in student loan debt. Your monthly interest is $1500, but you're only required to pay $500 a month based on the terms of PAYE. That results in $1,000 per month of additional interest or $12,000 per year being left unpaid.

If you were to continue with this for the entire 20-year repayment period, you're looking at a final balance of $200,000 + ($12,000 * 20 years) = $440,000.

After 20 years, you've paid $120,000, but since you didn't cover the interest, the outstanding balance has ballooned to $440,000.

While this may be forgiven under the terms of PAYE, you're still on the hook for income taxes on that $440,000, so you'll owe the IRS a lump sum of at least $150,000.

A Final Word on Income Based Repayment Plans

Income based repayment plans aren't inherently evil. They're helpful when you're trying to find your financial footing and avoid default or forbearance. There's nothing wrong with starting repayment after graduation under one of the plans available. Just remember, if there's any conceivable way for you to start chipping away at your loan's principal, start doing so as soon as you can.

Total and Permanent Disability Discharge

You can also get your loans completely discharged if you are ‘totally disabled.’ This is very rare and you're going to need certification from a doctor. Your prognosis must be extremely dire for you to qualify.

Death

There's not much to this except to know that student loans are discharged on death. Without getting too depressing, there are some situations where it might make financial sense to just use one of the income based repayments strategies and plan to die with outstanding student loans. If you went to school late in life and are saddled with a giant debt, it probably doesn't make sense to plunder your retirement funds to pay it down.

Compound Interest

Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.   -Einstein

If you're unable to pay all the interest that accrues in a given period, that unpaid interest will be added to your principal. This interest will capitalize and you'll be charged interest on your interest.

Example:

If you accrue $1,000 in interest during the first month of your loan and only pay $500 toward your loan balance, your principal will increase from $100,000 to $100,500. After that, the daily interest will be even higher. Meaning, the interest will be on $105,000 not the original $100,000.

Think of student loan debt as the opposite of investing in Retirement. Instead of receiving 7% in compounding returns, your returns are -7%. Paying debt is the opposite of an investment.

Congress sets interest rates for federal student loans and rates aren't as competitive as those offered by private lenders, because they're decided years ahead of time. This is why refinancing can be such a critical step in making your loans more manageable.

Compound interest cost me well over six figures in just a few years.

I thought I was doing everything right. I'd found a good job earning $60,000 per year, but I still couldn't afford the $2,200 monthly payments under the 10 year standard repayment plan, so I filed for one of the income based plans. They adjusted my required payment to about $500 per month which was still a lot of money, but I felt okay about it because I was paying what the government told me to.

Fast forward a few years to 2016. I'd never missed a payment since signing up for the income based repayment plan and over the course of three (3) years, I'd paid roughly $20,000 towards my student loans. I logged into my loan servicer, Navient, and my balance had grown to $244,957.48. I'd never missed a payment and done everything I was advised to do, yet my loans had grown by nearly $50,000.

I broke into a cold sweat and tried to get a grip on the math. "Surely this is a mistake," I thought. I knew I wasn't making progress on my loans, but I had no idea they were negatively amortizing and so quickly. I'd had my head in the sand for the last few years and was just hoping the amount I was paying was offsetting the interest accrued.

For the next few hours, I poured over every statement available. The numbers checked out.

I looked at the daily interest. It was more than $50 per day.

Think about that. Every single day, these loans grew by $50. That's over $1500 per month. Several hundred dollars more than rent. Let me put it this way. If I didn't pay at least $1500 the next month, the daily interest would continue to grow and it would be even more difficult to get out from under my loans.

If I hadn't gotten serious about my student loans in 2016, I would've paid another $20,000+ over the last few years and my loans would have continued growing to nearly $300,000. By that time, I'd be paying $61 a day in interest.

Think of it like you're digging your way out of a giant mountain of debt. If you've got a small shovel, it's going to take forever. To speed up your progress, go find a bigger shovel.

Common Mistakes

Many make two big mistakes when figuring out how quickly they can pay down their student loan debt.

Mistake #1 - Failure to Consider Income Tax

Many estimate how much they can payoff each year based on their pre-tax income. Here's a simple example to illustrate.

You make $50,000 per year and suddenly get an amazing job offer to double your salary to $100,000. In this scenario, many would be tempted to say, "Oh, I'll just maintain my standard of living and use the additional $50,000 in income to wipe out my debt." The reality is - the increase will only add about $30k once you factor in taxes.

Here's why: At $50,000, your take home pay is about $38,000. At $100,000, you'll be in a higher tax bracket and can expect to take home about $68,000. So the take home pay is only $30k higher after the big raise.

Takeaway: As you're trying to find your target income needed to hit your payoff goals, be realistic and factor in taxes and what you'll actually take home.

Mistake #2 - Forgetting About Interest

Do not forget about interest when creating your student loan attack plan. The error goes like this: "I have $100,000 in student loan debt. If I can pay it down by $20,000 a year for the next five years, I'll be debt free."

When you're buried under a mountain of debt, you tend to lie to yourself and view things through the glossiest lens possible. I did this, and it ended up costing me thousands in additional student loan interest.

This was one of the biggest mistakes I made and what caused my loans to grow from $160k to $250 in a few years when my federal interest rate was 8%.

Student loan interest compounds daily. If you have federally backed student loans, your interest rates are probably higher than those for mortgages and even auto loans. I highly recommend googling, "student loan payoff calculator" and entering your loan balance and interest rate to get a feel for how interest can impact your payoff speed.

Any Federal Grad Plus loan over the last few years carries an interest rate of around 7.5%, so if you took out $100k, you're going to need to pay an extra $5,000 per year to cover the interest.

A Fast and Reliable Way to Increase Your Income

Think delivery for Dominoes or driving for Uber. These will have you earning a second source of income in a matter of days. Unfortunately most part-time jobs you can get right away are going to be low paying, so they may not supplement your income enough to put much of a dent in your loans.

If you're fortunate enough to be in a field where you can pick up extra gigs using your specialized skillset, you're going to have an easier time boosting your income. Examples include software developers, nurses, pharmacists, and even MDs who can pick up extra shifts at urgent care facilities.

A Slow and Unreliable Way to Increase Your Income

If you had a dollar for every time someone suggested you start a side-hustle, you'd be totally debt free by now. Sure, you can open an eBay store or try your hand a drop-shipping watches, but these efforts are unlikely to produce meaningful income and risk wasting your time and what little liquid cash you may have.

We tend to only hear about the side-hustle superstar who created an Etsy store and had blowout success or that guy from accounting who started a gourmet beef jerky empire out of his garage.

The problem with these stories is they're unlikely to be lucrative unless you hit the jackpot. Unless you've got a great idea for a side business that you would enjoy and that you can start quickly and affordably, your time is probably better spent driving Uber.

A Business is better than a Side Hustle

I want to draw a distinction between a side hustle which tends to be a casual, temporary way to make extra cash, and a bonafide business venture, which is a formal plan for delivering value and making money over the long term.

Develop a New Skill

Learning a new skill can be a reliable way to increase your income, but it may take some time. I'd recommend researching profitable skills you can learn and deploy on nights and weekends. For example, you can take online courses in SEO, Google Ad Words, graphic design, photography, or programming. For less than $30/mo, you can access a library of resources on sites like Udemy and Lynda.com. If you don't want to spend money, there are tons of free learning resources on YouTube.

With a few extra hours a day, you can get out of debt sooner and open up more doors for you career. The key is to invest time you'd otherwise waste learning and working to improve yourself. If you do this for a decade, it's highly likely that you'll be debt free and commanding an income much higher than what yours is currently.

Two Debt Fighting Levers

There are two primary tools you have for fighting debt. You can cut down your budget or you can increase your income. Budgeting is important, but I want you to think about how each sacrifice contributes to your overall financial goal. I don't think it's entirely necessary to give up every single pleasure while tightening your budget. It's more important to think about all of the optional expenses you make in a given month and think about how much pleasure you gain from that.

With budgeting, it's important to cut out big expenses that aren't completely necessary. This will certainly speed up your payoff timeline and help you get out of debt faster, BUT too many people become budgetary zealots and obsess over every little $5 transaction. This is counterproductive and your time would be better spent figuring out how to boost your income than spending hours carving out another $100 in savings from your budget.

If you've got substantial student loans, you're wasting your energy if you're obsessing over every little purchase decision. Forgoing certain small expenses aren't really going to move the needle much when it comes to tackling six figures in student loan debt. Go ahead and have the occasional Starbucks coffee or meal out.

Think about purchases in terms of the impact they have on your life.

If you're going out drinking with friends every weekend or splurging on beer and wine at home, not only is that requiring a lot of your cash, but it's also not producing any positive financial gains. Plus you're not going to do anything productive afterwards and the next day your productivity will take a hit as well.

Is the occasional Starbucks run really that detrimental to your student loan payoff? If you have a large amount of debt, it's probably not going to make a big difference at all. Think about it this way. If you're going a few times per week and on each trip you spend $4 on a coffee, you might save $500 over an entire year by abstaining completely.

But, if you're having an extra coffee because you're coming in to work early or you're using that time at Starbucks to better your career, I say go for it. If you're working out of a Starbucks every Saturday afternoon for a year, I'm willing to bet that you'll be far better off.

Don't get me wrong. Budgeting is absolutely crucial and you need to get your expenses down while paying off debt. This is a mindset and it's important to know where every dollar is going each month before that money hits your bank account. It's just that your income will have a much bigger impact and you can have a little leeway when it comes to monthly expenses.

Find a better career

No one wants to hear this after years of higher education and taking out student loans to finance all that learning.

I wouldn't recommend this if I hadn't done it myself.

After seven (7) years of higher education and six figures of law school debt, I found myself graduating in 2012 to a horrible job market for attorneys. The firm I'd clerked for the previous two years offered me a starting salary that was below $50,000.

I knew I could create more value, but I had no idea where to look. I started thinking about what I enjoyed doing and spent time researching careers in those fields. As I did more research, I came across some interesting federal jobs that would use my undergraduate degree and they'd qualify for public loan forgiveness. This sounded like a great way to get my loans covered, so I started applying for federal jobs. After months of applications and interviews, none of the jobs panned out. In hindsight, I'm lucky I didn't get one, because the harder path I took set me up for even greater long term success.

Eventually I had an idea. What if I created my own job? I already had a business idea. I just needed a designer and a coder. I was broke and couldn't hire a programmer, so I would need to teach myself to code in order to build it.

For the next six months, I used every idle moment to absorb as much as I could. I was driving a shuttle bus to make ends meet and since we couldn't afford home internet, I'd park outside of Starbucks at the end of each shift and use the free Wi-Fi to teach myself to code. I'd hide my laptop under the driver seat of the shuttle and in between pickups, I'd pick up where I left off.

The startup idea didn't pan out, but I'd taught myself enough over a few months to land an internship at a local tech company. During my first few weeks there, I had absolutely no idea what I was doing. I arrived early and worked late every day for the entire internship.

In October 2013, one year after embarking on this journey, my internship turned into a full-time job with a salary and benefits. Within one year, I'd gone from a dull, crowded job market to starting a career in one of the hottest high paying markets out there – software development. I kept working with the same intensity for the next six years and I watched my income grow to dwarf what I would've expected at a law firm.

The experience wasn't easy and was often lonely. For my twenties and early thirties, I worked most nights and weekends. I sacrificed trips with friends, out of town weddings, put a home purchase on hold and delayed having children.

But now that I'm totally free and on the other side, it was totally worth it. I'm not saying a radical career move is for everyone, but I think it's worth considering if you don't love your current job and if you can't think of how your income will be enough to pay down your loans.

For me, I simply could not think of a way to pay down my loans without a major change. I had no savings, access to capital, or family wealth. My only asset was my time, so I had to be careful in how I balanced the decision to retrain myself with working full-time and not falling further behind in debt.

Don't let sunk costs close your mind to other possibilities.

Higher education no longer equips us with the tools that provide direct value to the market, so it's up to you to do the research and figure out if there's a way to deliver higher value. This can turn into a winding path, as it did for me. I went from searching for law jobs, to hunting for federal ones, to trying to start my own business by learning to code, to learning enough code to launch a really great career in IT. In the moment, it was frustrating and I wondered if my efforts would ever pay off, but eventually all of the effort and learning did pay off. What can you learn from this? All your efforts will eventually pay off. You just have to stick with it.

Think about what you're doing now.

Is this the career you want to be in for the next 30 years?

If so, think about how you can generate more income going forward. You'll want to revisit the math surrounding your income and remaining student loan debt. How much money do you need to add to pay your loans off within the next 5 years (or shorter if desired)? Can your current career get you there? Consider your current salary and whether you could increase your income by switching jobs or moving to a different geographic area.

Be sure to think about what that income will be after taxes and also consider the impact of student loan interest.

If you don't love your career, you may be more open to the possibility of changing things up. BUT, if you're in a high paying profession, you should probably buckle down for a few years and use your high income to knock out the debt as fast as possible. The fact that you don't enjoy what you're doing will motivate you to get out of debt faster.

How to find a different career

I realize this will sound like horrible advice if you just spent seven years and six figures on a masters or doctorate, but please, hear me out.

I'm not saying you need to start from scratch. First, I want you to realize that you are far more than the culmination of your degrees and the jobs you've held. You have totally unique life experiences and a point of view that's totally your own. This means you have a totally unique skill set that no one else has. You can put that to use.

Research Market and Job Trends

Think about what you enjoy doing and then do some career research to see if there are any jobs that intersect with what you're passionate about. A simple google search will reveal a number of reports on what jobs will be in the highest demand within the next 5, 10, and 20 years. Sometimes it's better to focus on high paying careers first and then think about which one you could enjoy doing.

Learn what Certain Jobs Pay

There are several online sources that will let you search and compare salaries for various occupations. Some examples are Indeed.com, PayScale, and Glassdoor. You can google these and start searching for positions to compare salaries. In exchange for creating a Glassdoor account, you'll be able to search salaries for certain jobs at both a geographic and a company level. This is particularly valuable if you're staying in the occupation and are hunting for an employer with better compensation.

In the post-COVID world, remote work is going to be more common so if your geographic area pays lower wages, be sure to search for employers in other areas who are open to hiring remote workers. Once you've got a sense of what you could be making, it's time to compare that salary to what you're currently making.

How much extra cash does that put into your pocket after taxes? Is it enough to justify making a move?

When you've found the perfect job, don't immediately jump for it and leave your day job. There's a lot of planning you're going to need to do before you're ready to do that.

Make Asymmetric Bets

It can be helpful to make a few asymmetric bets on your journey to paying off student debts.

I'm referring to areas where you have some degree of control over the outcome. This could be starting a small business, creating a blog, or investing in an area where you have unique, specialized knowledge. I’m not talking about gambling in the stock market or buying lottery tickets.

Asymmetric bets have outsized returns when you look at the potential payoff, the likelihood of them paying off, and the amount that you're putting in. I don't think of asymmetric bets as getting lucky. I think there's a simple formula for financial returns. While there's a certain degree of luck in each bet paying off, by increasing the total number of bets, the likelihood of having one payoff increases.

Talking to Family and Friends

This gets its own chapter because it's such a common part of frustration along your journey. It's going to be much easier if you have allies or people cheering you on. This could be a parent, spouse, or a mentor.

Sharing your situation and goals for paying off your loans can keep you motivated, but just be aware that some people are negative and have nothing better to do than tell you why you'll fail. Ignore these people. While encouragement and affirmation can be helpful, you shouldn’t rely on an external pat on the back to keep moving. You should be motivated on your own to pay off your debt, because your life is going to be so much better when you're free.

Don’t be surprised when people don’t understand what you’re going through. Many won't have the slightest idea what kind of pressure you’re under. Most tend to assume that everyone has student debt to some degree and eventually it just magically gets taken care of.

Sometimes it’s helpful to vent about student debt and how backwards the current higher education system is. Be careful not to complain endlessly about your mountain of student debt. It's hard not to fall into this trap when you're annoyed about missing out on trips and outings with friends. I was guilty of this and probably came across as a whiner on many occasions. Realize that all the negative talk about student loans and complaining does zero to change your situation. If anything, it makes you feel powerless to get out of debt, so don’t fall into the negativity trap.

You should communicate your goals to your spouse and those close to you so they'll be on the same page and understand that you're not in a position to take big trips, buy lavish gifts, or do anything extravagant for the near future.

Spouses and Student Loans

Unlike other married debts, student loans remain separate and only the original borrower is obligated to repay. As a married couple, it may be your debt or your spouse’s. This can be a unifying experience for spouses and will build confidence in your ability to work as a team.

If it's your debt

This was my situation. When I got married, most of our student loan debt was mine. I was embarrassed to be such a drag on our finances, and I didn't want to stress her out so I rarely talked about the debt. This put more pressure on me and felt extremely isolating. Once I got organized and put a plan in place, I shared a spreadsheet with all the details of my plan to pay it off. She took it better than I expected, and my biggest regret was internalizing this and keeping it to myself for so many years.

If it's their debt

Well, it's sort of your debt now that you're married. While technically, you have no obligation to pay it, if your spouse stops making payments you're going to be impacted because of the blow to their credit score and the potential for wage garnishment. You're far better off having a long conversation about the debt and working together to get a plan in place.

Married Filing Strategies for Income Based Plans

The way you file taxes can impact what you're obligated to pay under income based plans. If as a married person you file separately, this can result in lower monthly payments under a plan like PAYE. Before making this decision, you'll probably want to consult your CPA. It may or may not make sense depending on a number of factors like your income, your spouse's income, and your particular repayment plan.

👇 Keep going.

Continue to Part 4. This is the final post in this series, and I'll give you tips on minimizing interest, accelerating your pay off date, and maximizing your future wealth.