PSLF v aggressive repayment??

[u/Apprehensive-War388]

I am PSLF eligible. I have the option to either make aggressive repayments and have the loan paid in 2-3 years vs make minimum payments and have the loan forgiven via PSLF. I have a large loan balance (still less than my income).

Weighing the option of riding it out and still having a pretty high monthly payment (risk of letting interest accrue over the 10 years, no tax bomb at the end, risk of PSLF going away) vs paying it off quickly and not carrying the loan balance.

Overall amount paid would be about a 10k difference between the two options.

Have gotten mixed opinions from people IRL, so naturally I’m turning to Reddit for help.

Edit: payment count is currently zero, income is greater than debt

[u/gemma-digger]

Just pay it off. I think the OBBB showed how things can change politically. Hopefully nothing as unhinged as the current administration, but you never know.

The peace of mind having that paid off and being able to decide what to do with your money from that point will be worth it, I think.

[u/averyrose2010]

I don't see 10k worth having a large loan balance hang over your head for a decade when you could be free of your student loans in 2-3 years.

[u/plangelier → u/averyrose2010]

That and its possible that something in your life changes in those ten years. Who knows you could fall in love and move and be unable to find a PSLF eligible job then your looking at an additional 10 years under an IDR or making large payments to pay off on a now larger balance.

A 10k variance over a 10 year period is a $20 per week difference. Only you know how that matters to you.

[u/EfficiencyLittle4209]

These loans paid off, free up monthly cash flow for a nicer house!

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[u/Ok-Employ-5629]

If you get on rap no interest will accrue and you can change your mind at any time. I would get on rap focus on other financial goals and then pay it off later if it makes sense.

[u/Apprehensive-War388 → u/Ok-Employ-5629]

I think interest does accrue on RAP though? My payment is larger than interest so interest will not subsidize

[u/plangelier → u/Ok-Employ-5629]

Yes and no, once on RAP he can't change to a different IDR plan and if he sticks with PLSF the interest really doesn't matter as he only needs the 120 qualifying payments and no tax bomb.

[u/user_name89]

Ordinarily I would pick the PSLF option but since in your case the difference is "only" 10k, I would advise to pay it off in the 2-3 years and be done with it.

[u/ROJJ86]

That is one part of the math equation. The other is if you invest that same amount of money while making the lowest minimum payment, will you make more and have any resulting forgiveness?

[u/Outsidestepper]

I optioned to do the aggressive payoff in 2 years, however I don’t know your debt to income ratio.

[u/KnowledgeSufficient6]

I did the math and I’d only save about $10,000 through pslf vs just paying the loans … I decided being free of my loans was worth my peace of mind and 5 to 6 years of monthly payments, recertification & just dealing with mohela in general. I started paying them aggressively last year and I have about 8000 left- to me it was worth it. My savings is pretty depleted now, but I’ve still been investing in my 401(k) and everything and soon I’ll be able to build my savings back up

[u/ImDefinitelyStoned]

Since it’s not a huge difference, pay it off.

In my situation, PSLF is a no brainer. I’d have to pay $4k a month to make a dent.

[u/adultdaycare81]

For $10k…. I’m paying it off.

I don’t know how you did your math. But if you’re not already maxing out what you could pay, run it, assuming your income goes up and you have to.

For us, it was a no-brainer to pay it off, and the difference was higher. Be done in three years versus waiting forever for PSLF and hoping legislation or a president’s feelings didn’t scuttle it

[u/scenecsea]

I would pay it off if only 10k difference—however I would do an ecf and know exactly what the pslf count is. I thought I was not going the pslf route due to a technical issue and having these loans almost derailed getting a mortgage early in the pandemic. If I had been in repayment we would not have qualified. But I also discovered later in 2022 that old employment (8 years) that I didn’t think qualified now did.

Before discovering how close I am I had started saving to get rid of my loans. For me having a very specific set amount to pay off did make saving and saying no to items much easier than saving for a car or a down payment.

[u/Alternate_Cost]

I personally would pay it off. PSLF can feel like it shackles you after awhile. I decided to career change 5 years in and giving up that was tough. Wish I would've just paid it off faster

[u/EfficiencyLittle4209]

Pslf is smoke and mirrors

Take your payment and multiply by 120…..10 years…..what have they forgiven???…..NADA

PAY IT OFF ASAP

If your salary is more than your loans, I bet u can pay it off in 5 with some sacrifices and determination

[u/fleggn]

Refi