Maat, you're approaching the debt from only one perspective, debt. Not looking at the larger picture.
They have high incomes, but they need to secure some sort of EF more than $7k because they have these bills which are $600k. Even with their incomes it will take time to clear their debts.
Unfortunately until they clear $600k the bank can come in and foreclose on the house. Hence if they lose their job(s), they need money not in retirement accounts to tide them over until they can find jobs.
Reality, you can't live for years on end without an emergency happening. And the higher the income the longer it usually takes to find a job. They will likely get severance depending on what fields they are in, but no one should count on it.
Plus they have to still make their monthly obligations, and by your method if they lost their jobs, what would they stop paying? There isn't much you can stop paying.
Truth is what's done is done (like debt and children). They can't go back and undo student loans, and they can't undo kids. And it seems like the student loans were a pretty good investment if they are raking in $200k+/year at 31 with potential to go a lot higher. ROI on student loans is looking mighty good.
Wisely because they are stashing $31k/year into a 401k, they are able to save for retirement. That would only be about 60% towards debt anyway with their incomes. So it would only pay off $18k/year extra. Almost 50% loss off the top, not worth it at all considering their interest rates.
Now, if they focus on not increasing their lifestyle in the next 3 years they should be golden.
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