If I was in your shoes, I would want to keep the rental, but we have a few things to think of. First, do you need to purchase a home now? If not, I would wait til late summer to try to figure out if there's anything out there to consider purchasing. I would then start looking, if you qualify, and consider purchasing then. Main reason, if you are able to have 2 properties appreciating, that you'll be "earning" more money towards retirement.
Once your wife gets her position, you can start paying down her student loans, and once that's paid off, maybe you can pull some money off your rental to purchase other rental homes, which you can also afford the payment for, since you no longer have the student loans to pay off.
Just my 2 cents. Best of luck to you!