Recent Grad Loan Payback Optimization Tool Dev. Phase I Forum

[lacrossebrother]

Could we collaboratively create a tool for proper decision making on how to pay back loans following graduation?
This should be at least a two phase project with

1. Brain storm proper inputs, critical decision points, payback schemes, and different outputs for the tool
2. Design the tool --whether we make it excel/google sheet based or more survey based
3. *optional agile phase to "retool" the tool once designed to accommodate more factors, output options


So, let's start. Please help me brain storm. I guess we exclude PSLF people because what's the point?

Critical Inputs
*Debt upon graduation w/ interest rate
*Salary upon graduation
*Market (for tax rate and COL)

Secondary (and potentially optional?) Inputs
[*]Kids?
[*]Estimated Income CAGR
* Rent (could/shoud override some of the assumptions generated by the market preference above)
* Known expenses
* Other preferences? Debt-aversion, interest in home ownership?

Options
5, 10, 15 Standard Payback
10, 15, 25 SOFI Refinanced (projected SOFI rate?)
PAYE
IBR
PLSF
??

Outputs:
Net monthly take-home per year w/ income increase, graphed out annually till loan = $0.
?

[downbeat14]

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[lacrossebrother]

Sounds like a solid idea.

I might add whether or not it's a good move to take any 401k match, or if preferring to max out retirement options while in the payback process. I've seen a lot of posts on here about whether to pay into a retirement acct versus paying down debt immediately.

Oh interesting idea. I don't know how that's taxed or affects the contingent payback plans so I don't know how to treat it --do you know?

[Johann]

There is no standard tool because its all based on your risk tolerance levels and prediction of the market to a large degree. Employer matching retirement should always be maxed out and in almost all cases I would max retirement savings before loan payments. Everyone who has been paying debt aggressively the last 4 years has left tons of money on the table because the market has killed it. So over the last 5 years its clear the minimum payment longest payment plan would be the right result. But over the next 5 years this could be the worst option.

[lacrossebrother]

Well we can put in market prediction variable then, brah.