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Hello everyone,
Was hoping to get people's thoughts on a topic that has been discussed on WCI before, but due to recent events may be worth revisiting.
I've read the WCI posts about aggressive student loan payoff vs PSLF, but was wondering what everyone's thoughts were on the recent outcomes from the first wave of PSLF applicants (https://www.marketwatch.com/story/this-government-loan-forgiveness-program-has-rejected-99-of-borrowers-so-far-2018-09-20), of whom 99% were rejected.
My wife and I are both hospitalists at an academic center and have a total of $420,000 of federal loans at 6.5% interest rate. We make a combined pre-tax income of $330,000. We have been weighing the following options:
1) Consolidate all loans (~3.5% seems to be lowest right now) and aggressively pay off in 2-3 years.
2) Pay minimum payments through IBR while funneling rest into taxable investment account, in case PSLF fails.
We had initially planned for option #2 before the above article came out, after reading many of the posts on WCI.
If we aggressively pay, we may miss out on ~$300,000 of free money. But if PSLF fails, I calculate we may pay around $80,000 more in interest above the principal. And, with early payoff we would have peace of mind, as our lives are dominated right now by stress over these loans.
We would greatly appreciate any advice people have on this, in light of the recent developments with PSLF - does this change any of your thinking regarding pros/cons of either option?
Thanks for reading and thank you all for the wealth of informative posts on this forum and website!
Was hoping to get people's thoughts on a topic that has been discussed on WCI before, but due to recent events may be worth revisiting.
I've read the WCI posts about aggressive student loan payoff vs PSLF, but was wondering what everyone's thoughts were on the recent outcomes from the first wave of PSLF applicants (https://www.marketwatch.com/story/this-government-loan-forgiveness-program-has-rejected-99-of-borrowers-so-far-2018-09-20), of whom 99% were rejected.
My wife and I are both hospitalists at an academic center and have a total of $420,000 of federal loans at 6.5% interest rate. We make a combined pre-tax income of $330,000. We have been weighing the following options:
1) Consolidate all loans (~3.5% seems to be lowest right now) and aggressively pay off in 2-3 years.
2) Pay minimum payments through IBR while funneling rest into taxable investment account, in case PSLF fails.
We had initially planned for option #2 before the above article came out, after reading many of the posts on WCI.
If we aggressively pay, we may miss out on ~$300,000 of free money. But if PSLF fails, I calculate we may pay around $80,000 more in interest above the principal. And, with early payoff we would have peace of mind, as our lives are dominated right now by stress over these loans.
We would greatly appreciate any advice people have on this, in light of the recent developments with PSLF - does this change any of your thinking regarding pros/cons of either option?
Thanks for reading and thank you all for the wealth of informative posts on this forum and website!
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