jackattack17 wrote:TLS, it's been a while. I'm 18 or so months into repayment. Have about $50k left in grad plus and stafford loans left from ls, overall rate is about 6.5%. I work in government in a high COL city, salary about $90k now. I'm on the standard 10 year repayment plan, paying about $650/mo plus $50-$200 extra per month when i can manage it. I plan to remain in pi/govt indefinitely but that could change I suppose if and when my fiancé and i move. My agency has a repayment program but it's a competitive process and I'm certainly not counting on that, though I've applied.
1. should i continue on my current repayment plan? or should i pay minimum payments for now, banking on 10 year forgiveness? can i even get lower payments, with my relatively low loan balance and high income?
2. should i refinance with sofi or something? there's a chance I'll get agency repayment help but that goes out the window if my loans are refinanced privately.
3. other things i should be thinking about?
It's a risk-reward question. And it's basically impossible to answer well without knowing how competitive your agency's repayment program is, or what your reasonable chances are of getting it--or, for that matter, what it entails (does it require a full 10-year commitment to get any, or does it pay some of your loans off as you go regardless of how long you stay at your agency?).
Assuming you have some shot of getting the repayment program and/or you think there's a decent shot you'll stay at the agency for long enough to get the Gov's generic 10-year forgiveness, I'd probably pay minimum payments and put the extra money into either a high-yield savings account or some reasonable conservative mutual funds. Although you probably won't get a 6.5% return from those investments, the 2-5% that you'll earn will reduce the cost of not repaying your loans more quickly. But whether it makes more sense to pay your loans a little more quickly, or to save that extra money in the event you fall out of some loan assistance program, really depends on the reasonable likelihood of each. If you're 99% not going to stay in your loan assistance program, then you'd be a fool to not continue what you're currently doing, for example.