It's got a repayment estimator (bottom left after you log in) that lays out how much you'll pay under each plan as well as an estimate for loan forgiveness.
Sorry to reanimate an old thread, but...
I have been trying to evaluate loan repayment options, and this simple comment was the biggest assistance.
You read a lot about the "tax bomb" and whether Obama will get that change thru Congress, and people trying to back into a number and get super fancy with projections. Just don't do all that; let the government calculate yours for you.
For the lazy, I've put my screenshot of my loan status up: see link
. I feel like my loan amount is fairly average (approximately $123k, which the numbers are based off of; the Gov calculation includes uncapitalized interest) for a law school grad, so maybe this will be instructive for you.
For obvious reasons, if you can muster the standard monthly payment amount, or can foresee even hitting the graduated payment schedule, those make the most sense. However, in this scenario, anything less than $100k a year would make hitting these numbers prohibitive. At $75k for instance, your pre-tax weekly pay is $1562. After taxes (let's use 25%), health insurance co-pays, etc etc., you would be paying well over 25% of your monthly salary to loans, every month, for 10 years.
This is feasible if you want to be aggressive and not otherwise build up savings, make big purchases, propose to a girl, etc. AND you were guaranteed to not lose your job/be unemployed/not paid at some point (extended maternity leave, for instance, is not paid).
Under a graduated/standard loan payment attack, you would essentially be barred from buying a house during these 10 years until you could put 20% down, as FHA loans (low down payment loans) prohibit, without exception, a loan that House payment + other payments (home insurance, home owner's assocation, credit cards, auto, etc) from exceeding 43% without an exception. Your greater than 25% of your salary monthly loan payment would almost inhibit this by default.
SO, if living as a pauper for 10 years and forgoing savings, buying a home, & major life events is not your thing, look down the payment options list, at both the monthly payment ranges as well as the total amount paid.
The thing to keep in mind is that unless the aforementioned "tax bomb" is fixed, any forgiven loan amount will be taxed as ordinary income by the IRS in the year the amount is forgiven (at 2013 tax rates
, it likely would be taxed at 33%).
Given all of the above, PAYE quickly becomes a strong option. $183k total amount paid, plus 1/3 of the loan amount forgiven paid as tax yields basically a 220k payment for a loan originally of $123k.
Income-Contingent Repayment however at first blush appears the strongest option, assuming the above "tax bomb" is never fixed by the government. 2nd shortest repayment period (its default payoff period is 25 years, so the payoff is occurring much quicker, in approximately 12 years), more initial financial flexibility initially, and the payoff being income sensitive. It also encourages early payoff of the loan if possible, given it does not depend on income forgiveness in this scenario.
And the reason I think ICR becomes the strongest is because of the default assumptions in the government calculator: 5% salary increases annually, with 3.5% indexed poverty increases (which governs the payment floor on income-based plans).
My route, based on all of the above assumptions, is to go with PAYE for the first year, save the $600-$700 per month in a separate savings account based on ICR projections, and see how the actual financial flexibility works out. If it's feasible, after a dry run under the conditions, I will switch over to ICR and dump my 1 year of trial savings immediately against the loan balance.