Should I stay in PSLF or pay off my loans?

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Go Nats!

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Joined: Wed Aug 27, 2014 7:10 pm

Should I stay in PSLF or pay off my loans?

Postby Go Nats! » Sat Dec 01, 2018 11:30 pm

I'm one of those public service kids that really stuck to it and I've been on PSLF for a while now. Here's the thing - I've kind of hit the jackpot when it comes to non-profits jobs. I'm making 100k plus and I'm likely to make more if I choose to stick around. After some preliminary budgeting, I realized I'm in a position to pay off my loans in three years if I budget aggressively. Otherwise, I'd have to wait six more years for the ten year PSLF to activate.

What do you think I should do? It would suck to flush the four years I spent paying into PSLF down the drain. But this program is constantly under review for change in the President's budget. I'm always going to be in public interest too, so it feels like I should just stay in it.

I'd ask my school or a financial adviser but this program is so niche that I thought I'd ask folks on this forum.


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Re: Should I stay in PSLF or pay off my loans?

Postby QContinuum » Sat Dec 01, 2018 11:49 pm

First, even if PSLF is eliminated, it's unlikely to affect you or anyone currently relying on it: I understand the program is baked into the master promissory note, so the government is contractually bound to honor it for current borrowers. So I don't think PSLF's potential demise should be a major factor in your calculations here.

That said, I think whether to pay off your loans yourself depends heavily on how much you expect to pay toward PSLF over the remainder of your 10 years, and how much you expect to be forgiven. Look at what makes the most sense financially. You should probably consult an accountant or other financial expert on this. If you don't qualify for IBR or PAYE and your spouse also makes a good salary, you could be paying quite a bit over the remainder of your 10 years, decreasing PSLF's value to you.

Regardless of what you do, I'd recommend saving aggressively. Never a bad idea to have a solid financial cushion backing you up (or to get a good head start on saving for retirement - who knows what shape Social Security will be in by the time our generation makes it to 67.5?).

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