Savings vs student loans

Submitted by Scallion-Busy t3_11bqh2f in personalfinance

I was hoping to get some opinions on if I should keep aggressively saving/buying mutual funds on market red days. Or If I should just start paying towards my student loans again.

So I am a 30 y/o M who graduate with my DPT (doctorate of physical therapy) when I was 26 y/o in May 2019. I went to a state school. Commuted my last year to minimize debt. But still accrued a ton.

I graduated with 126k all federal student loans.

The past two years, after picking up 300 hours of OT a year I’ve had a gross income of 90k

Before the pandemic I was living at home and aggressively paying off my loans with most of my paycheck, but have since moved out.

I live in NY. My rent is currently approx $1700 with utilities.

I now have 70k student loans. All federal loans with interest rate between 5.8%-6.2%.

Last year I paid 17k into my student loans. I haven’t been making payments since the pause was extended,back in sept/oct 22’

I have been utilizing the avalanche method, paying off highest interest first.

I now have a 10k emergency fund, liquid.

15k in a HYSA.

I have no credit card debt.

I have a 6k stock portfolio. I bought heavy on those really bad market wash out days when SPY slipped below 365 into low 350’s and have since sold 75% of my shares to lock in profits.

Now I’m mostly holding jepi mutual fund monthly divi (just buy 3 shares a paycheck), I some dis stock avg $85 and amzn at $88.

I also do drive a 2010 Honda Civic with 140k miles. For now it’s still going fine. I’ve already replaced the alternator.

Idk if I’ll ever have the chance to hoard/ save $ like this due to loans being on pause till October 23’

Am I wrong for wanting to continue to build my savings rather than switch back to heavily paying loans?

I know there are many different federal loan programs. I work in orthopedics, so I don’t really qualify for pslf.

My loans cause a ton of anxiety. I just want them gone that’s why I was paying aggressively.

I’m moving out of state at the end of the summer for my gfs job. So it’ll be a new state and a new job for me so I’ve been saving extra, just in case something goes wrong with the move.

Thank you for your time and recommendations

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InteriorAttack t1_j9z8pih wrote

First of all if you are going to invest stop trying to time the market. You wont win. You wont beat anything. You should be investing in tax advantage accounts every pay period. Second there is nothing wrong with paying down loans since they are 6%ish. You could do both. And third you need to find a higher paying job. 300 hours of OT to "only" make 90k isn't great and to spend 130k on student loans to do is crazy to me

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Scallion-Busy OP t1_j9zaw5t wrote

Yeah I invest in the mutual fund bi-weekly so not trying to time the bottom. But with last years volatility within the market on those really bad wash outs I did throw significantly more $ into stocks I’ve been patiently waiting an entry for.

Agreed I could probably do both, but would probably want to do 60-40 of 70-30 to get ahead of this thing.

And totally agreed. I was dumb and went into PT to help people. It’s rewarding but the financial stress is not worth it for me personally. I’ve worked an “easy gig”. A “low volume” clinic… however now we are slammed and I’m seeing 15-18 patients a shift. It’s exhausting. Mentally and physically.

I’ve realized I need to increase my income. We are moving for my gfs job. She’s a physician and doing her fellowship. I am going to use next year to look for a higher income position as this may mean I need to leave orthopedics (my “passion”… what I studied my ass off for 3 years to learn) for home health care or a nursing home/ snf. I will also be looking for a travel position as we will only be in CT for a year.

But yes the debt to income ratio or rate or return for physical therapists is atrocious. I just did not understand this when I was younger.

Thanks for the response

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alwayslookingout t1_j9zxyu0 wrote

I personally think DPT is a rip off, if not outfight a scam. Calling it a “doctorate” so they can charge PTs more for schooling is abhorrent. But that’s besides the point.

My wife also had about $125K of loans at ~6% APR for her grad school. When loans got put on deferment she went in super hard and paid all of it off. You have plenty in savings IMO- I’d go all in on those loans again.

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Scallion-Busy OP t1_j9zyvsz wrote

I 100% agree with you. It was turned to a doctorate so we can do “direct access” so you can see a PT without being referred by a MD … buts it’s only for 10 visits of 30 days whatever comes first. Plus that’s only after 3 years of experience. I’ve talked many aides out of pursing PT. It financially just can’t be justified. Reimbursements keep getting cut so we have to see more people.

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Stock-Freedom t1_j9z8mp1 wrote

Follow the flowchart.

My generic advice:

https://i.imgur.com/lSoUQr2.png

Here is the flowchart from the r/personalfinance subreddit’s Prime Directive. If you follow that, you will be ahead of almost all of your peers.

Stop by the sidebar to see the Common Topics, which include basic money handling and investing.

You don’t need to talk to anyone or buy some random book to do this. You have all the tools right here.

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iceman2663 t1_j9za7pv wrote

Flowchart advice definitely works! Highly recommend it, OP.

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Scallion-Busy OP t1_j9zbw0d wrote

Thanks! Yeah I’ve seen and used this chart as an outline. I have it printed out in my office. I plan to follow this when the loan pause stops.Unique situation rn with the pause

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iceman2663 t1_j9z9fdv wrote

Sounds like you have approx $25k liquid cash between the emergency fund and the HYSA, which is a nice emergency buffer. I would recommend you continue taking advantage of the student loan payment pause by saving & investing as much as you can. Once payments resume, assuming you don’t have any projected major expenses in the short term, I would recommend assessing how much liquid savings you can apply towards the loans at once in a lump payment while still retaining at least 6 months of emergency fund at a minimum. After that, prioritize paying the remaining loan balance using the avalanche or snowball method until paid off.

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Scallion-Busy OP t1_j9zbaft wrote

Thanks for the response. Yeah I’m leaning more toward continue aggressive savings and see what happens with this pause or “forgiveness”.

I did that last September 22’. Then I made a large lump sum payment right before loans started back up. And then they got paused again so I went back to saving up

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[deleted] t1_j9zvn74 wrote

[deleted]

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Scallion-Busy OP t1_j9zwenl wrote

Had a bunch of classmates do travel PT. Very lucrative if ur willing to move around every 13 weeks. I was applying for travel positions in Georgia back when Covid started but ended up staying in NY and met my gf. I am going to look for travel jobs in CT. Just applied for my CT license $400 later.$285 application fee. $90 for fsbpt to send my scores to ct. $20 for official New York State license to be sent to CT then $10 for transcript to CT… my gf is a physician so gotta stay close to the hospital. But I will check out some home care cuz I ain’t selling my soul in outpatient for much longer

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shmoove11 t1_ja0rqmq wrote

Is the plan to stay in CT? Can you look into working at the hospital system your GF will be at and got the PSLF route?

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