A 31-year-old single mom from Vermont is facing a mountain of student debt after becoming a pharmacist. When she recently called into “The Ramsey Show” for advice, personal finance expert Dave Ramsey gave her his famous unfiltered response.
Pharmacist Earning $150K, But Trapped By Debt
Hillary told Ramsey that she owes $326,000 in federal student loans across 21 separate loans. She said she graduated in 2020 and had already paid off $70,000 in private loans. However, the federal loans had been in forbearance, allowing interest to balloon.
“I tried to pay off as much as I could before the interest started,” Hillary said. “But now the interest is starting, and I can’t seem to figure paying [them] off.”
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Ramsey responded directly. “You got completely screwed on your education,” he said. “You paid like five times more than you should have to become a pharmacist.”
Hillary admitted she doesn’t fully understand why it ended up costing so much. “It shouldn’t have been anywhere near $400-and-something-thousand to become a freaking pharmacist. No, no, no,” Ramsey said.
Retirement Contributions On Hold
To Ramsey, it’s clear: she couldn’t continue splitting focus between debt payoff and retirement investing. Hillary had been trying to do both. Co-host George Kamel called that a competing goal. “You either want to get out of debt or invest. You can’t do both at once and make progress,” he said.
Ramsey urged her to pause all retirement contributions and throw every available dollar at her student loans. “You’re broke. You have got to do something different. You’ve got to attack these student loans to get rid of them. They’re not a pet, they’re an ugly zoo animal,” Ramsey said.
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A Four-Year Battle Plan
When asked how much she could realistically put toward her loans each year, Hillary estimated between $40,000 and $50,000, considering her childcare expenses. Ramsey pushed her to reach $75,000 a year.
He then walked her through his debt snowball method: list the loans from smallest to largest, pay minimums on all but the smallest, and throw everything at that one until it’s gone. Then move to the next.
“The goal here is to make more payments than the interest is accruing, so the balance goes down,” Kamel said.
Ramsey calculated that at $75,000 a year–about $6,000 to $6,500 per month–she could be debt-free in four years. “Otherwise, this is going to just stay in a death cycle on you,” he warned.
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