Girlfriend with a LOT of Student debt.

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mikeski569
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Girlfriend with a LOT of Student debt.

Post by mikeski569 » Mon Nov 24, 2014 1:16 am

So my ultimate question is, what is too much debt (meaning too much to pay off) for the average middle class family (both college educated).

A little about us. So I've been dating this girl for almost 9 month now. I've gotten to the point where my feeling for her are being negatively affected by the amount of student debt she has. She's intelligent and went to very good schools, albeit at a hefty price. She's 240,000 dollars in student debt, and just bought a new car, another 20k in debt. She has a Law degree. But has choosen not to practice law specifically, instead she has gone in to a field that probably pays quite a bit less than her education would have brought her otherwise. I want to applaud her for doing what she loves. but that brings me back to her debt. She has to be in the top 99 percent in terms of total debt owed for student loans. I don't know what to do.

I'm a 33 years old, and I'm a saver. I like to buy nice things, but only when I can afford them. I don't have ANY debt, and I have a great start to a savings and retirement account. I have a modest 50k a year salary and i'm college educated. I am looking to buy a house ASAP. I also live in an expensive part of the country so housing is not cheap.

I like aspects about her. She's good for me. But her debt is already causing me stress and anxiety.

Any words of wisdom, either way, would be appreciated.

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dbCooperAir
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Re: Girlfriend with a LOT of Student debt.

Post by dbCooperAir » Mon Nov 24, 2014 10:52 am

What are her goals and about what does she make now?

She is already $260k in debt and you want to buy a house, you did not note a housing cost but if I toss in $240k for a house that's going to start you guys off $500k in the hole. If she is making the same as you (wild guess on my part) that's a lot of debt to service on $100k/year.

Any plans to make a kid or two? If so would one of you want to stay home?
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tainted-meat
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Re: Girlfriend with a LOT of Student debt.

Post by tainted-meat » Mon Nov 24, 2014 10:55 am

It's great to pursue a career she is passionate in, but with that kind of debt it's time to put the passions aside and just make some serious :moneybag :moneybag :moneybag

Also, why the heck is she buying a $20k car with all that debt. This is very irresponsible unless she is making close to 6 figs in her line of work.

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Re: Girlfriend with a LOT of Student debt.

Post by White Coat Investor » Mon Nov 24, 2014 10:56 am

This should be an interesting conversation. "Listen, I really like you a lot, but you owe too much money, so, see you later." Maybe you can do it over a text message.

Seriously, the most important thing with that kind of a debt is a plan to pay it off. That might be involve practicing law until it's gone, then doing what she loves. Or perhaps signing up for a job at 501(c)3 so at least it will be forgiven after 120 payments.
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Zecht
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Re: Girlfriend with a LOT of Student debt.

Post by Zecht » Mon Nov 24, 2014 10:59 am

As she is your SO and not your wife, I'm assuming you're stressing because you want to (or are already) moved in together. I'd be conscientious of how you handle things with her, because until you are married it is *her* problem that she was that far in debt. If she is concerned with it, I would recommend that she try to do something commensurate with her education that will bring in a sufficient sum to pay off her debt. Personally if I had the education and the means to obtain work in a $200k+ field right out of college (assuming Ivy's for that kind of price) then it makes little sense to not work the first 2-5 years out in that field before changing over to something I love risk free.

Keep in mind it is *your* money that you want to use to buy a house and supposedly your name as well. If she is open to suggestions, having great pay for a couple of years (while controlling lifestyle inflation) would be ideal for her to put herself in a comfortable position where she is not paying off debt for the rest of her life. It doesn't matter what you make nearly as much once you are not bound to debt.

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gardemanger
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Re: Girlfriend with a LOT of Student debt.

Post by gardemanger » Mon Nov 24, 2014 11:01 am

I don't understand how her debt impacts you if you are not living together and/or planning to marry.

If you are thinking about living together, it could actually be beneficial to her situation if it reduces her living expenses and increases her ability to pay down debt. But from the little you said (i.e. that she just borrowed for a $20,000 car) it sounds like you're saying you don't think she has a serious enough commitment to reducing her debt.

It *sounds* like you're saying your values about money are not in alignment with her values. If that's the case, sorry to say, that's sooner or later going to be a dealbreaker. And if you only like "aspects of her" -- well, don't be the guy who stays in a relationship out of inertia and for the 'benefits.'

oliver81
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Re: Girlfriend with a LOT of Student debt.

Post by oliver81 » Mon Nov 24, 2014 11:02 am

I think if everything else in the relationship is good, then you can make it work.

But it sounds like you might not be compatible financially, in a basic sense. That's asking for trouble. It seems like you're a frugal saver and she's a spender - I'm guessing. In any relationship where that's the case, you will have a lot of conflict over money issues, regardless of whether you're servicing a big debt or not. If it's not the case, then yeah, the debt still sucks, but you'll just deal with it.

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Re: Girlfriend with a LOT of Student debt.

Post by stoptothink » Mon Nov 24, 2014 11:02 am

mikeski569 wrote:
Any words of wisdom, either way, would be appreciated.
Be upfront and discuss it with her. I learned the hard way that differences in money management/ideology are the greatest cause of divorce. If she isn't on-board with focusing on paying down that debt and getting into good financial shape, probably not worth pursuing a relationship any longer. If she is, help her out and see where it goes.

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Re: Girlfriend with a LOT of Student debt.

Post by Laura » Mon Nov 24, 2014 11:04 am

I agree that this is a discussion you need to have sooner rather than later. While it sounds kind of cold to focus on finances, it will impact your entire future so you need to have a talk. She may not realize how much trouble she is in or she may just be choosing to ignore the bad news. You need to figure this out now.

Laura
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mholdi1540
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Re: Girlfriend with a LOT of Student debt.

Post by mholdi1540 » Mon Nov 24, 2014 11:10 am

Similar life situation in past that led to divorce. You save and she spends and debt is not going away. Get married, buy a house and have kids you will be in hock for the rest of your life. Debt will cause major problems in relation and kids will cost you mucho child support. Advice: Adios Baby - and find someone more responsible like yourself. If not , prepare for a life of debt and misery. There's plenty of other women out there- you just need to look and it is not that difficult. Anyway - my 2 cents of advice based on actual experience !!!! Good Luck !!!

LeeMKE
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Re: Girlfriend with a LOT of Student debt.

Post by LeeMKE » Mon Nov 24, 2014 11:14 am

If you don't move on, be sure to have a prenuptial agreement with this gal. Detail HOW the debt will be repaid, and be sure you are comfortable with that. She needs to ask her family if they will help clear this debt with her. Is that a possibility?

Or don't marry her, and just live together.

And with this debt load, I'd forget about having children. If that was in your plans, how does that affect you? By the time that debt is repaid, she will be too old to have children. And having children with this debt load is a recipe for early divorce IMHO.

You wouldn't be the first to bail due to financial considerations. I vividly remember hearing a boyfriend in financial trouble lament that he was thankful he had $100,000 in his retirement account he could tap -- he was almost 50. I realized this guy was never going to catch up and I wasn't willing to sabotage my retirement. I moved on. . .quickly and quietly. Having a conversation about his financial state wasn't going to change facts, so I excused myself without discussing it. Caused less bad feelings.

Parents reading this should consider the impact student loans will have on their own children's future. Women have a short window in which to bear children, so I consider student debt especially dangerous for them. And listen to what is being considered by a prospective spouse.
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Sidney
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Re: Girlfriend with a LOT of Student debt.

Post by Sidney » Mon Nov 24, 2014 11:16 am

IMO the new car purchase is the tip-off.
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saladdin
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Re: Girlfriend with a LOT of Student debt.

Post by saladdin » Mon Nov 24, 2014 11:41 am

It won't work.

Any chance of early retirement, kids or even buying a house with her is slim to none.

You're old enought to know that you can not live on love alone and you get to choose your mate.

I would bail with no regrets. Being an adult is knowing what will work vs hoping it will. This won't work, your sleepless nights are already telling you the answer.

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Re: Girlfriend with a LOT of Student debt.

Post by jackholloway » Mon Nov 24, 2014 11:42 am

Reality check: we are piling on because a recent grad just bought a new Honda Fit? That can be leased for $140 a month? That is considered a very low end car by most?

Very very few people get out of school and decide that a junker and ramen is the proper reward for years of deprivation and a high power degree, so immediately jumping to "dump the wastrel" seems unreasonable. Yes, frugality is a value here, but if the debt is amortized over decades, she may well be living below her means. She has a job, and one she likes apparently, which puts her head and shoulders above more than one recent grad I know.

Long term compatibility is more important, of which financial compatibility is only one component. Reframing an earlier poster, if family and service are important to her, she should not spend her rearly relationship years, on a potential mate that does not share her priorities.

I concur with EmergDoc - a rational conversation putting all the elements on the table might be very enlightening.

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Re: Girlfriend with a LOT of Student debt.

Post by montanagirl » Mon Nov 24, 2014 11:52 am

it's not that easy to just go get a lawyer job...maybe she can't. competition is fierce even in public interest law. and maybe since she's been with OP she has lost ambition. time's a wastin. longer she's out of law the harder it will be to get in.

OP did she graduate last june? has she tried to find a LAW JOB?

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Rager1
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Re: Girlfriend with a LOT of Student debt.

Post by Rager1 » Mon Nov 24, 2014 11:58 am

Listen to your "inner voice". I think it has already told you what you need to do.

Ed

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Re: Girlfriend with a LOT of Student debt.

Post by FelixTheCat » Mon Nov 24, 2014 11:59 am

I would talk to her about her debt and how SHE plans on paying if off. This is not your problem unless you intent to make the GF your spouse. I looked up on Nolo and it says it will always be her debt unless you cosign her loans.
Debts. In community property states, most debts incurred by either spouse during the marriage are owed by the "community" (the couple), even if only one spouse signed the paperwork for a debt. The key here is during the marriage. So if you incur a debt, such as a student loan, while you're single, and then get married, it won't automatically become a joint debt. (An exception is where a spouse signs on to an account as a joint account holder after getting married.) Some states, like Texas, have a more nuanced way of analyzing who owes what debts by evaluating who incurred the debt, for what purpose, and when.

After a legal separation or divorce, a debt is generally owed only by the spouse who incurred the debt, unless the debt was incurred for family necessities, to maintain jointly owned assets (for example, to fix a leaking roof), or if the spouses keep a joint account.
P.S. My other advice mimics the other posters. Follow your gut to see if she is really the one for you.
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Re: Girlfriend with a LOT of Student debt.

Post by JupiterJones » Mon Nov 24, 2014 12:05 pm

Sounds like this has very little to do with the debt itself.

Rather, the existence of the debt is symbolic of choices your GF has made. Those choices shine a light on her values, priorities, and how she approaches life in general. And it's those things that are giving you the heebie-jeebies.

And I don't blame you. If you and she aren't on the same page in terms of financial responsibility, or at least reading the same chapter of the book, then that's going to make any future you two have together quite bumpy.

So yeah, I think you guys need to hash this out.
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Re: Girlfriend with a LOT of Student debt.

Post by mpowered » Mon Nov 24, 2014 12:15 pm

Subbed in hopes that OP will provide an update.

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Re: Girlfriend with a LOT of Student debt.

Post by 123 » Mon Nov 24, 2014 12:29 pm

Some people love dogs, some people love debt. Dog owners get along best with other dog owners, the same probably holds true for those with substantial debts.

Don't expect the zebra to change its stripes.
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mikeski569
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Re: Girlfriend with a LOT of Student debt.

Post by mikeski569 » Mon Nov 24, 2014 12:36 pm

gardemanger wrote:I don't understand how her debt impacts you if you are not living together and/or planning to marry.

If you are thinking about living together, it could actually be beneficial to her situation if it reduces her living expenses and increases her ability to pay down debt. But from the little you said (i.e. that she just borrowed for a $20,000 car) it sounds like you're saying you don't think she has a serious enough commitment to reducing her debt.

It *sounds* like you're saying your values about money are not in alignment with her values. If that's the case, sorry to say, that's sooner or later going to be a dealbreaker. And if you only like "aspects of her" -- well, don't be the guy who stays in a relationship out of inertia and for the 'benefits.'

Her debt impacts our future earings potential. For every $$$ she sends to pays to pay off student loans, that's more $$$ I have to pitch in. Someone's gotta pay it.

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Re: Girlfriend with a LOT of Student debt.

Post by keystone » Mon Nov 24, 2014 12:37 pm

This is an interesting discussion and I suspect that if you submitted your post on a different forum, you would get drastically different feedback than from us Bogleheads.

Since you already know how much debt she has, presumably you two have discussed this already to some degree. I would find a convenient time to bring this up and ask her directly what her plan is to conquer her debt. You may not like her answer, particularly if she seems unphased by it. If I were in a similar situation, I wouldn't say that the enormity of debt was an automatic dealbreaker, but it would certainly be a cause for concern, particularly if she seemed unconcerned about it.

Do you have any sense how she is financially aside from the 260K in debt? Does she save for retirement? Spend lavishly on clothes and luxuries?

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Re: Girlfriend with a LOT of Student debt.

Post by midareff » Mon Nov 24, 2014 12:38 pm

Laura wrote:I agree that this is a discussion you need to have sooner rather than later. While it sounds kind of cold to focus on finances, it will impact your entire future so you need to have a talk. She may not realize how much trouble she is in or she may just be choosing to ignore the bad news. You need to figure this out now.

Laura

I don't think it is cold at all to focus on finances. The reality of life is love is grand but there are sooo many fish in the sea at your age there is no point in starting out a quarter mil + in the hole. This will grind on you everyday, and I suspect it is already. It's nice and perhaps even noble to take employment far below your educational preparation would dictate to (I assume) do good things for others but you have to do good for yourself first. Mismatched financial goals will shipwreck most journeys. It's definitely time to do the talk, and be prepared to walk the walk right afterwards.

anonforthis
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Re: Girlfriend with a LOT of Student debt.

Post by anonforthis » Mon Nov 24, 2014 12:47 pm

How old is she? When I met my husband I was young 19 with a lot of debt. My husband didn't care at all. He helped me paid it off and I also worked 2 jobs. I was making $7 an hour and I'm sure you gf makes way more than that now.

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Re: Girlfriend with a LOT of Student debt.

Post by Beth* » Mon Nov 24, 2014 12:54 pm

I have seen a number of marriages fail because the couple were not on the same page financially. If you are at the point where you are considering moving in together or getting married, I think you need to work this through first. Couples counseling may be a good idea. Different attitudes toward finances don't go away and they become more serious if you acquire a mortgage, children, etc. They don't go away with divorce either if there are children involved; they just transfer to fights about child support. Any good couples counselor should understand the importance of a couple being in agreement on financial goals and attitudes.

Do your future self a favor and have a discussion with her about this and then see a professional for help if you think it is warranted. You obviously care about her so I would put in the effort to see if you can come up with a plan to work this through while being realistic about the fact that it may not be possible.

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Re: Girlfriend with a LOT of Student debt.

Post by Flashes1 » Mon Nov 24, 2014 12:54 pm

[OT comment removed by admin LadyGeek]

swaption
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Re: Girlfriend with a LOT of Student debt.

Post by swaption » Mon Nov 24, 2014 12:58 pm

Problem is that attitudes toward finances and debt in particular are cultural in many ways. For example, what might seem normal for folks in say California might seem like execessive leverage in someplace like New England (kind of like attitudes toward plastic surgery). So my guess is that the actual debt here is only part of the problem, but perhaps the bigger concern is her attitude toward the debt and personal finace generally. We live in a world where we make it very easy for people to make some bad decisions. Forget about the car, how did she get here in the first place? How many times did she go down the wrong fork in the road? This is where it ultimately comes down to the cultural thing in terms of values. For example, some people couldn't possible understand buying a smaller house with 70% LTV when you could buy much more house at a 90% LTV. People can grow to become just too comforatble with lots of debt, and I think that can be a very difficult thing to reverse. Only you know if that is the case here and to what extent that creates issues for you.

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mikeski569
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Re: Girlfriend with a LOT of Student debt.

Post by mikeski569 » Mon Nov 24, 2014 12:59 pm

I was pretty disappointed that she bought the new car. I worked out a nice little spreadsheet on how much she'd save (including gas). for every 5k she didn't spend on a new car, it knocked off about about 100 dollars a month in payments which she could have used to repay students loans. I didn't go as far to say that it would also knock off about 2 years in repayment and 30k per, perhaps i should have.

Here is the kicker. She is a family mediator. So she very well knows that money is the number 1 reason people get divorced. I don't know what her earning potential is., but she has started to go into business with one of her mediator co-workers. Neither of them have the capitol to really invest much into growing that business. Currently they are both stuck working mostly for their (own) competitor which takes about 70% percent commission. I think she's making between 30k- 40k. But, she has only been out of school for 12 months.

We don't live together, but she has talked about wanting to do so within the next year. I have the downpayment right now for a house quite a bit bigger than i can afford the monthly payments for (by myself). I'm trying to skip the Condo/Townhome, as HOA fee's range 200 - 450 per month here. So i've been patiently waiting to meet someone compatible.

So far her philosophy has been to not let the debt ruin her life. She talks of trips to Europe, and seems to be ok with paying it off slowly over the next 20-25 years until forbearance. This stresses me out. I've never lived in debt, I've never had debt. I worked and spent responsibly through college. I managed to put money away at the end of each year. 20-40k of school debt would have been unfortunate but manageable, but 260,000????? Other than the debt, she seems like a pretty good mate. But i just can't seem to wrap my head around how much 260k in debt is going to affect our lives. She even wants kids, but I'm on the fence about that. So all that compounded with student debt and a taste for international travel, to me sounds like a lifetime in servitude to Sally-Mae with the phones ringing off the hook with creditors looking for blood.

Have any of you paid off over 200k in college debt before (that isn't a Dr or an Ivy league lawyer) working middle class jobs? Is this possible?

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Re: Girlfriend with a LOT of Student debt.

Post by jackholloway » Mon Nov 24, 2014 1:00 pm

anonforthis wrote:How old is she? When I met my husband I was young 19 with a lot of debt. My husband didn't care at all. He helped me paid it off and I also worked 2 jobs. I was making $7 an hour and I'm sure you gf makes way more than that now.
Yeah, but your husband sounds like he wanted to help. If "every dollar she sends to pay off loans, that's another $$$ he has to pitch in" is typical of their interactions, he s looking for something to hold against her for the rest of their time together. Consider the opening - he thinks she needs to get a better job not for happiness or service, but to free up more of his money. Not theirs, his. This may indicate distance about more than money.

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Re: Girlfriend with a LOT of Student debt.

Post by Jack FFR1846 » Mon Nov 24, 2014 1:07 pm

As much as I can understand your viewpoint. Consider this: $240 for an undergrad degree at a good private college is now the norm. She has a law degree on top of that? She must have had good scholarships along the way. My alma mater is now $62k a year for engineering. Add 3 years for a JD for maybe another $200k and all of a sudden $240k doesnt sound so bad.

Has she already paid off $200k in loans?
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Re: Girlfriend with a LOT of Student debt.

Post by backpacker » Mon Nov 24, 2014 1:10 pm

mikeski569 wrote: Have any of you paid off over 200k in college debt before (that isn't a Dr or an Ivy league lawyer) working middle class jobs? Is this possible?
I don't know what the interest rate is, but you'll need to put about $25,000 a year towards the debt to pay it off in ten years. On a joint salary of $80,000 - $90,000 that's certainly possible. But you have to be on the same page on this. She needs to be willing to divert money form new cars and vacations. You need to be willing to divert money from saving and may need to rework your plans for buying a house.

One key to having these sorts of discussions, I've found, is to do everything you can to avoid setting things up so that the debt is "her problem" that she needs to fix. The more you can talk about the debt as a problem "out there" that the two of you are fighting together, the better things will go. Emphasize that you're willing to make sacrifices to help fight the problem.
Last edited by backpacker on Mon Nov 24, 2014 1:31 pm, edited 3 times in total.

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Re: Girlfriend with a LOT of Student debt.

Post by surfhb » Mon Nov 24, 2014 1:15 pm

I agree....if she's the right person for you I would take on the debt only if the plan was to tackle it in a short amount of time. This includes selling her vehicle and living on one salary until it's gone.

I mean, drastic steps need to be taken before you bring kids into the mix.

Anything beyond that, I'd push the ejection button.

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Re: Girlfriend with a LOT of Student debt.

Post by mikeski569 » Mon Nov 24, 2014 1:30 pm

jackholloway wrote:
anonforthis wrote:How old is she? When I met my husband I was young 19 with a lot of debt. My husband didn't care at all. He helped me paid it off and I also worked 2 jobs. I was making $7 an hour and I'm sure you gf makes way more than that now.
Yeah, but your husband sounds like he wanted to help. If "every dollar she sends to pay off loans, that's another $$$ he has to pitch in" is typical of their interactions, he s looking for something to hold against her for the rest of their time together. Consider the opening - he thinks she needs to get a better job not for happiness or service, but to free up more of his money. Not theirs, his. This may indicate distance about more than money.[/quote wrote:
I want to help her. She is a good person. Whatever happens between her and I, I sincerely hope the best for her. It's not about who pays what, it's about whether this is financially feasible.
"every dollar she sends to pay off loans, that's another $$$ he has to pitch in" is typical of their interactions, he s looking for something to hold against her for the rest of their time together." [/quote wrote:
A few months after we started dating i started having some serious health issues. Those issues are attributed to stress and anxiety. Long story short, I tried going back to school to become a Physicians Assistant so that i could afford the kind of payments we are talking about. But the stress of working two jobs, and taking med school level classes landed me in the hospital with 6k in medical bills. And i had to drop all my classes. I am STILL experiencing some of the symptoms that put me in the hospital and this is months later. So to say my motivations are purely selfish in nature is a little harsh. I did that for us, having only known her for less than 6 months.

It's ignorant to think that since the debt was incurred by her that it is hers alone and will not affect both persons. It reduces the household income. I'm guessing 250k is close to $1500 - 2000 a month in loan payments. That's not including a mortgage payment, but is in fact about the same amount as a mortgage payment. How many middle class family can afford 2 mortgage payments.

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backpacker
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Re: Girlfriend with a LOT of Student debt.

Post by backpacker » Mon Nov 24, 2014 1:35 pm

mikeski569 wrote: I'm guessing 250k is close to $1500 - 2000 a month in loan payments. That's not including a mortgage payment, but is in fact about the same amount as a mortgage payment. How many middle class family can afford 2 mortgage payments.
When I plugged the numbers into an online calculator, it told me that you needed ~$2000 month to pay it off in ten years.. What about putting off a home purchase until the debt is paid off? Whether this is feasible will depend on the comparative cost of renting to buying in your area. Putting off having kids until you've got a substantial portion of the debt payed off is also going to be a good idea.
Last edited by backpacker on Mon Nov 24, 2014 1:38 pm, edited 1 time in total.

rooms222
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Re: Girlfriend with a LOT of Student debt.

Post by rooms222 » Mon Nov 24, 2014 1:38 pm

I know two attorneys that both graduated about 15 years ago with around $150,000 in debt each. Both have made some progress on the debt in the last five years, but little before that. One invested in a coop in Manhattan and made a nice profit on that, rents now, and makes around 200k as a consultant. Her career took off slowly for the first decade or so. The other makes about $150k now in a low cost of living area, and has made baby steps towards paying off the debt. She had discussions with me about it, saying that student loans are forgiven at death (true), and that it hampered her getting married. Both are childless. I think it is earlier in your GF's career to see how it will work out financially for her. Collaborative divorce is an up and coming area, and she may end up doing fine in the long-term.

I think it will be very stressful for you, if you get married/have kids. If your income went up, it could reduce the stress, as you could be a buffer on your new family financially, without taking on paying her loans. Being in a high cost of living area makes it more difficult.

Saw your last post while I was typing- yes, I think it will be difficult to see what happens with her financially, and you are dealing with your future as well. Having made a difficult leap of faith that cost me both financially and physically in the past, I have to say ultimately, it is what it is- I have a family and a daughter, which I am grateful for, but it was a painful path. I have no regrets, though.

barnaclebob
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Re: Girlfriend with a LOT of Student debt.

Post by barnaclebob » Mon Nov 24, 2014 1:39 pm

I would see how she reacts to a suggestion of seeking higher paying employment for a few years with the goal of putting all of the excess income towards the debt until it hits a certain level, say 50k. Then she can be even more free to do work that she really loves. However if shes taking starting steps to run a business then her career may eventually take off when she is the one taking a 70% cut of commissions.

Do you know if she is likely to receive a decent inheritance? That's a serious question that could help put your mind at ease with the debt if you plan to be with her long term.

For now you shouldn't buy any home that you cant afford yourself unless you are willing to have tenants should you break up.
Last edited by barnaclebob on Mon Nov 24, 2014 1:40 pm, edited 1 time in total.

lululu
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Re: Girlfriend with a LOT of Student debt.

Post by lululu » Mon Nov 24, 2014 1:39 pm

I think your health is telling you this is not the right person for you.

I'm a little concerned that you have the down payment for a house you can't afford by yourself. You are acting like you have a financially sound partner, and you don't. That's wishful thinking.

I would walk away from this relationship, and once your health settles down if you are still interested in being a physician's assistant, revisit studying for that at a pace you can healthily sustain. That's a solid future for you.

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mikeski569
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Re: Girlfriend with a LOT of Student debt.

Post by mikeski569 » Mon Nov 24, 2014 1:43 pm

backpacker wrote:
mikeski569 wrote: I'm guessing 250k is close to $1500 - 2000 a month in loan payments. That's not including a mortgage payment, but is in fact about the same amount as a mortgage payment. How many middle class family can afford 2 mortgage payments.
When I plugged the numbers into an online calculator, it told me that you needed ~$2000 month to pay it off in ten years.. What about putting off a home purchase until the debt is paid off? Whether this is feasible will depend on the comparative cost of renting to buying in your area. Putting off having kids until you've got a substantial portion of the debt payed off is also going to be a good idea.
Well instead of putting $2500 into a mortgage I'd be putting $1300 - 1500 into a rental. Even at 3k a month towards loans, that's probably still 10 years until repayment with interest.

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Boglenaut
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Re: Girlfriend with a LOT of Student debt.

Post by Boglenaut » Mon Nov 24, 2014 1:44 pm

I agree with JupiterJones above.

How she views debt is as much of her personality as anything else. It's reasonable to consider that in a potential mate just as much as if you had strong opposing religious views, or one was a couch potato homebody and the other was a sky-diving adventure seeker. It does not mean she is "bad", but just not the right person for you. And if you chose not to pursue it for this reason, I think it is perfectly valid and that does not make you a bad person either.

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mikeski569
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Re: Girlfriend with a LOT of Student debt.

Post by mikeski569 » Mon Nov 24, 2014 1:44 pm

backpacker wrote:
mikeski569 wrote: I'm guessing 250k is close to $1500 - 2000 a month in loan payments. That's not including a mortgage payment, but is in fact about the same amount as a mortgage payment. How many middle class family can afford 2 mortgage payments.
When I plugged the numbers into an online calculator, it told me that you needed ~$2000 month to pay it off in ten years.. What about putting off a home purchase until the debt is paid off? Whether this is feasible will depend on the comparative cost of renting to buying in your area. Putting off having kids until you've got a substantial portion of the debt payed off is also going to be a good idea.
Well instead of putting $2500 into a mortgage I'd be putting $1300 - 1500 into a rental. Even at 3k a month towards loans, that's probably still 10 years until repayment with interest.

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just frank
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Re: Girlfriend with a LOT of Student debt.

Post by just frank » Mon Nov 24, 2014 1:45 pm

When we were both grad students, before we got married, my cohab girlfriend came home and told me that physicists were the least likely people to get divorced (she was in sociology, i in physics). I said "that's great, what major is the most likely to get divorced?" ...'sociologists' she said. :shock:

In the end, we got married, and then she left me. At least I can say that she 'warned me'. :D

I wonder what the stats are for family mediators. :wink:
Last edited by just frank on Mon Nov 24, 2014 2:18 pm, edited 1 time in total.

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mikeski569
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Re: Girlfriend with a LOT of Student debt.

Post by mikeski569 » Mon Nov 24, 2014 1:59 pm

I will heed your guys advice and have another sit down with her. We have talked before about her loans, it ended with her in tears.

What I fear is going through the discussion to find out we are financially incompatible (in terms of how we see repaying it) and leaving her with the knowledge and weight that the debt and philosophy on repayment is what broke us up. :-(

rai
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Re: Girlfriend with a LOT of Student debt.

Post by rai » Mon Nov 24, 2014 2:05 pm

mikeski569 wrote:Have any of you paid off over 200k in college debt before (that isn't a Dr or an Ivy league lawyer) working middle class jobs? Is this possible?
We paid off double that (but we're both MDs). I think you need to think about $1-$2K a month for 10-20 years don't you think?

It would drive me bonkers if my wife had her $250K debt and decided she didn't want to practice medicine.

To me, that aspect got your GF who felt it was OK to borrow money for law degree she is not using would drive me crazy, unless she is making 6-figures (plus) doing some other job.


I know people who are 53 and wife still has student loan debt. I could not imagine paying off a debt that long (and p.s. she doesn't even work so her degree is just sitting on her wall).
Last edited by rai on Mon Nov 24, 2014 2:08 pm, edited 1 time in total.
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dumbbunny
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Re: Girlfriend with a LOT of Student debt.

Post by dumbbunny » Mon Nov 24, 2014 2:08 pm

Keep your finances separate.
Propose to her with the promise she signs a pre-nup.
Buy the house if you want a house (based on your salary only).
Let her pay off her own debt.
The trips abroad can wait until the 5th, 10th,...anniversaries.
Live happily ever after.
“It’s the curse of old men to realize that in the end we control nothing." "Homeland" episode, "Gerontion"

BigJohn
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Re: Girlfriend with a LOT of Student debt.

Post by BigJohn » Mon Nov 24, 2014 2:11 pm

mikeski569 wrote:Her debt impacts our future earings potential. For every $$$ she sends to pays to pay off student loans, that's more $$$ I have to pitch in. Someone's gotta pay it.

I don't mean to be ugly but your mixing of personal pronouns says a lot. If you're thinking about a life together this is going to be your debt as well not just hers and you're going to have to sacrifice to pay it off. It honestly sounds like deep inside you know you don't want to assume this much debt and I'd listen to that little voice.

Some data that might be helpful. I did a quick search on some mortgage sites and the total debt-to-income ration they were looking for is 36% max.
Back-end ratio: The total debt-to-income, or back-end, ratio, shows how much of your gross income would go toward all of your debt obligations, including mortgage, car loans, child support and alimony, credit card bills, student loans and condominium fees. In general, your total monthly debt obligation should not exceed 36 percent of your gross income. To calculate your debt-to-income ratio, multiply your annual salary by 0.36, then divide by 12 (months). The answer is your maximum allowable debt-to-income ratio.
When combined your income is ~$100K so the max total cost of everything above should not exceed $3000/month. If paying off her student loan & car is going to cost $2000/month for the next 10 years you how much house can you buy in your area for a total payment of no more than $1000/month? By comparison, if by yourself you're making $50/yr with no other debt you can afford ~$1500/month as your house payment. Just demonstrating that taking on this much debt will push you farther away from your goal of home ownership.

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TxAg
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Re: Girlfriend with a LOT of Student debt.

Post by TxAg » Mon Nov 24, 2014 2:13 pm

mikeski569 wrote:I was pretty disappointed that she bought the new car. I worked out a nice little spreadsheet on how much she'd save (including gas). for every 5k she didn't spend on a new car, it knocked off about about 100 dollars a month in payments which she could have used to repay students loans. I didn't go as far to say that it would also knock off about 2 years in repayment and 30k per, perhaps i should have.

Here is the kicker. She is a family mediator. So she very well knows that money is the number 1 reason people get divorced. I don't know what her earning potential is., but she has started to go into business with one of her mediator co-workers. Neither of them have the capitol to really invest much into growing that business. Currently they are both stuck working mostly for their (own) competitor which takes about 70% percent commission. I think she's making between 30k- 40k. But, she has only been out of school for 12 months.

We don't live together, but she has talked about wanting to do so within the next year. I have the downpayment right now for a house quite a bit bigger than i can afford the monthly payments for (by myself). I'm trying to skip the Condo/Townhome, as HOA fee's range 200 - 450 per month here. So i've been patiently waiting to meet someone compatible.

So far her philosophy has been to not let the debt ruin her life. She talks of trips to Europe, and seems to be ok with paying it off slowly over the next 20-25 years until forbearance. This stresses me out. I've never lived in debt, I've never had debt. I worked and spent responsibly through college. I managed to put money away at the end of each year. 20-40k of school debt would have been unfortunate but manageable, but 260,000????? Other than the debt, she seems like a pretty good mate. But i just can't seem to wrap my head around how much 260k in debt is going to affect our lives. She even wants kids, but I'm on the fence about that. So all that compounded with student debt and a taste for international travel, to me sounds like a lifetime in servitude to Sally-Mae with the phones ringing off the hook with creditors looking for blood.

Have any of you paid off over 200k in college debt before (that isn't a Dr or an Ivy league lawyer) working middle class jobs? Is this possible?

Run!

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mikeski569
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Re: Girlfriend with a LOT of Student debt.

Post by mikeski569 » Mon Nov 24, 2014 2:16 pm

lululu wrote:I think your health is telling you this is not the right person for you.

I'm a little concerned that you have the down payment for a house you can't afford by yourself. You are acting like you have a financially sound partner, and you don't. That's wishful thinking.

I would walk away from this relationship, and once your health settles down if you are still interested in being a physician's assistant, revisit studying for that at a pace you can healthily sustain. That's a solid future for you.

I "can" afford a downpayment on a house much larger than i can afford payments for. Meaning I'm a good saver. I know that I don't have a financially sound partner. That's why i'm having this discussion with you guys on this forum. I have the downpayment for a much larger house than I can afford on my own, but I am not in the market for a house. Although i want to be. I am living in a 500square food 1br apartment living well beneath my means, because I understand with the current path I may have some rather sizable hurdles to overcome. All said, that doesn't make it easy to swallow.

swaption
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Re: Girlfriend with a LOT of Student debt.

Post by swaption » Mon Nov 24, 2014 2:16 pm

mikeski569 wrote:What I fear is going through the discussion to find out we are financially incompatible (in terms of how we see repaying it) and leaving her with the knowledge and weight that the debt and philosophy on repayment is what broke us up. :-(
It is not your job to insulate her from reality. Let her feel the pain, not you. But what you say above is not what would break you up. That is true because you are having the discussion. If it were only about the debt, then you wouldn't even have the discussion, you would just break up with her. What can break you up is how she responds to the discussion, and that comes down to values.
Last edited by swaption on Mon Nov 24, 2014 2:28 pm, edited 1 time in total.

coldplay221
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Re: Girlfriend with a LOT of Student debt.

Post by coldplay221 » Mon Nov 24, 2014 2:25 pm

You could save yourself of the problems by redirecting her to this website. If she is as intelligent as you claim, she will swiftly be able to see how she is doing compared to well established principles of finance.

IMO, you are going to be facing a lot of stress if you don't sort this out before further commitment. Also IMO, when the economy is good and you have a job, you should kill your debt, because when the economy goes south, chances are you are out of a job and you will be bankrupt.

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Re: Girlfriend with a LOT of Student debt.

Post by rai » Mon Nov 24, 2014 2:26 pm

mikeski569 wrote:She talks of trips to Europe, and seems to be ok with paying it off slowly over the next 20-25 years until forbearance.
I hate that we all seem to be piling on as GF is not around to defend herself. But Myself and my wife both are in the top 3% of earners and yet we have not been to Europe and were both late 40s.

Sure it would have been nice to go to Europe, but paying off our student loans was PRIMARY, then house and retirement, then kids college funds. Lastly on our list of priorities is going on a trip to Europe which I have to assume means 2-3 weeks and probably $10K (+/-)
Last edited by rai on Mon Nov 24, 2014 2:36 pm, edited 3 times in total.
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