Selling Personal House to Pay Off Wife’s Student Debt – Are We Doing The Right Thing?

My wife (29) has $269k in student loans at average 5.9% interest rate from her doctorate schooling. She makes $74k, I make $81k (LCOL), and our combined take-home is about $110k. Her salary growth is limited unless she does back-to-back travel therapy contracts. I don’t want to move into management in my field — I know I’m not built for it mentally, but it is the next step in my career.

We bought a foreclosure 2 years ago on a first-time homebuyer program, put $25k into renovations done through my own sweat equity (finished basement, full bath, etc.), and a couple realtors who walked through say we’d walk away with $97k–100k tax-free (due to tax rules since it's our primary residence) if we sold today. That's after seller/buyers fees and transfer tax. Mortgage is $1,500/month.

Our plan is:

• Sell the house in the next 6 months, throw the $100k(ish) at her loans and the balance drops to $170kish.
• Move into her mom’s basement for 2 years.
• Live off one salary, use the other to aggressively pay down the debt.
• Be debt-free in 2.5–3 years.

We thought about doing another flip, but PMI + closing costs ($40–60k) make it too risky and ties up our cash flow instead of putting it towards the debt, which seems cleaner and faster to us… Our motto has been short-term pain for long-term relief. I love this house and what I've done to it, and seeing it all vanish into the debt hole makes me cringe. But we know what we need to do vs what we want to do.

Is there anything smarter we could do with that tax free $100k instead, or does this sound like a solid plan (mathematically + emotionally)?