I previously made posts on here about how to save for the eventual tax liability that might be of interest to some people (viewtopic.php?f=15&t=242595
I've since made a few posts on other forums and have been convinced that just paying my loans ($150,000) off as quickly as possible is my best bet. The cons to IBR were just too much for me:
1. Any calculations are built upon a lot of assumptions that are indeterminable (payments depend entirely upon income, which is almost impossible to forecast).
2. This instability could lead to an incredibly high tax burden, or having to pay back the loan in full after crossing a particular income threshold.
3. Incentivizes me to make less gross income and reduce my adjusted gross income as much as possible.
4. Almost certain to cost more over long term (than just paying it back in 12-15 years), especially if I eventually obtain a higher salary after letting interest balloon.
5. Would require me to file taxes married but separately, thus forgoing substantial deductions annually until loans are paid off (student loan interest deduction; child and dependent care credit; earned income credit; and several other big ones that amount to a ton of money each year).
6. Would have to make plan to prepare for tax liability at year 25 (all of which are less efficient than just paying off the loan).
7. Government could change rules midway through (they pulled the rug out from veterans for God's sake; they could do it to borrowers if they needed the money).
In short, there's just a shitload of cons to IBR. In the short term it seems like the easy way out, but Christ, I'd rather be done with these loans by the time I'm 40 than base almost every financial decision on my student loans until I'm 52. I think I can accomplish this even while matching my 401k (3%; lame but better than nothing), making minimal contributions to a Roth ($1000 per year, maybe), saving for a down payment on a house, etc.
So, now that I've been persuaded the other way, anybody care to run through the numbers and tell me why I'm wrong that IBR is just a scam?