[USER]

PSLF Student Loan Question:
I have 5 years of payments left to qualify for PSLF on a $220k Grad Plus loan.

I was on REPAYE, but was automatically switched to SAVE so I am now in forbearance at 0% interest instead of the 6.4% for the original loan.

I am considering paying it off and not having to worry about future political restructuring of the program and/or hospitals losing their not for profit status in that time frame as that is how I am eligible.

For some background I am married, early 30s with household income of $190k.

We have $300k in retirement accounts, $180k in cash/equivalents for a future home purchase/emergency reserves. We had a 40% savings rate last year.

I’m not in a hurry to make a decision, but we are selling a rental property and after all expenses we should walk away with $160k which has me considering taking this win and dumping these proceeds into the student loan and paying them down ASAP.

Interested to hear thoughts from others who have been in a similar situation

Thanks!

[Lee]

My son in law had a $220k loan for which he PSLF’d for, applied for discharge and got no decent response.

The private company Navient was contracted by the DOE to handled these requests very badly.

They got fired. The new company sent him an Email with a notation that his debt was forgiven and his account balance was zero.

He barely believed it.

Later he got a check for $20,000 with a note that he had overpaid on his student loan.

[Lori]

Given the current admin and the numerous changes and cuts made to all things education, I would either pay off the loans with your proceeds or keep the payoff amount in a separate account (HYSA or IRA) just in case.

[Amy]

Given the budget resolution that was passed by the House, I would probably pay off the loan near the end of the forbearance period (sooner if the 0% rate during forbearance gets rescinded).

When you sell the rental, be sure to set aside taxes for the depreciation recapture (at ordinary income rates) and the capital gains.

You may want to make an estimated tax payment.

[Author]

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