This is a complex question about an opportunity cost of PSLF forgiveness and/or allowing money to grow in lieu of the below two student loans
285k -60-70% way through PSFL - 4 years left, 5 yrs worst case scenario; 7.1% interest
234 - 25% way through PSFL - 7.5 years left, 8 years worst case scenarior, 7.65% interest
About myself - projected salary: 160k this year, then -> 270k -> 300k -> 330k -> 350k. I have worked for a nonprofit for 6 years (specifically made sure they are 501c3, and currently I am working for a 501c3 (for the next 5+ years).
No mortgage, credit card, or significant vehicle debt; I live in a very low cost of living area (bottom 10% in the US).
Question: My IBR payments, which are being calculated on the previous years income (they lag one year behind and are calculated on previous years federal tax returns). Will be the following 5400, 20000, 39000, 41000, 44000 projected on the next 5 years based on my income.
According to my modeling and calculations, it's better to keep the loans with the Federal government (rather than refinance the smaller loan on a longer forgiveness path with a private lender to a lower interest rate).
My question essentially is this - The opportunity cost for total tax free PSFL forgiveness cannot be denied in my situation. However, I also want a plan B if PSLF fails- so I was planning to dump money in an aggressive investment account (>10% growth) at a rate of about 5000 dollars per month (the goal is to have essentially 200K stashed and ready to go). If my larger loan gets forgiven, then ill keep the smaller loan with the government. If PSLF fails, I will pull the money out of this investment account, and dump it into the federal loan with the high interest rate and just refinance the other loan to a smaller interest rate.
Either way, if the loan gets forgiven, I have a large investment account that I can use to buy a home, or if PSLF fails, I can pay down a significant amount.
To stave off this question - I also have a potential partner who makes 250k a year, I think she has 200K loans only. I do not plan to involve her money or finances with my loan. It's my loan, my burden that I will deal with.
What are your guys thoughts?
Submitted September 02, 2019 at 02:03PM by GalactusisBack https://ift.tt/2NML7l8
