bk1 wrote:Mlk&Ckies wrote:If you're gonna be on PAYE with a big law salary, the benefit isn't what could hypothetically be forgiven in 20 years (don't listen to johann). The benefit is that the lower payments give you time to get your financial house of cards in order and it's insurance for if you don't think your salary will stay at that level for as long as you need to pay off your loans.
As far as refinancing, that's a risk that's going to be really personal. For me, the risks of interest rates increasing more than another percentage point over the next year scares me less than the risk of not liking my job or being bad at it. At least for now, getting on PAYE gives me the peace of mind that if I don't like my lifestyle, I can conceivably do something else and not be totally financially devastated.
As far as which plan is best, if you qualify for PAYE that's better than REPAYE I'm pretty sure, although I haven't really looked at the details in a while.
I agree it's a personal risk assessment, but I feel like being able to refi again to a longer term is a sufficient hedge. Unless you think you're going to potentially ride out to forgiveness, I lean towards refi sooner rather than later.
It's not just the risk of interest rates rising, but also paying the 6-7% interest on your current loan (rather than the refi rate) up until the time you refi. I've already saved nearly 10k in interest purely from the first year of my refi.
Agreed, especially with the bolded.