Let me clarify. I am in the IBR program, because I view it as an insurance policy in the event I can't pay off $2700 a month in some months (car accident, babies, illness etc). I don't have to go into forbearance and lose my rate discounts. However, while in IBR, I'm still paying what is the standard monthly payment ($2700) while I can. This is partly because I don't have the time or skill to invest in a fund that would net greater than 6.55%.
Then you have been doing exactly as I suggested (i.e. using IBR to ensure the benefits of that plan and then paying additionally toward the loans that you choose), while debating with me that it doesn't make sense for a two income household. At no point did I say that you (or anyone) should pay only the minimum. In fact, quite to the contrary. I have repeatedly explained that the purpose of IBR (in your situation) was to allow you to make selective payments with the remainder of the money ($2700 minus the IBR payment) that you are allocating to loans.
But you're comparing benefits only looking at the minimum payment. That's like comparing two credit cards only by looking at the minimum monthly payment.
It's like you've somehow been reading half of each sentence that I've written. That's not at all what I've been saying. Read it again. I have laid out exactly the plan which you are currently using (while you've been debating with me that it doesn't make sense). You enroll in IBR so that you MAY have the benefit of some forgiven interest while making additionally payments on the principle. In both scenarios, you are putting $2700 per month toward the loans, but under IBR, you MAY have some of the interest forgiven and you can allocate ~$1700 of it toward whatever loan(s) you choose.
Your interest is still accruing under IBR.
Your interest is accruing under every plan - and at the same rate. The only difference is that, with IBR, the government MAY be forgiving some of that interest. With a 10 year repayment (or any other plan that I'm aware of), they aren't.
The stuff about unpaid interest in subsidized loans being covered for 3 years is true, but our minimum IBR monthly payment (just over $1000) covers pretty much our entire monthly accrued interest so that benefit is almost negligible.
That "stuff about unpaid interest" is the entire thesis here! It may be negligible for you, but it is there. And there's no reason you shouldn't take advantage of it (which you are) because there's absolutely no downside. And you could exploit it even further if you, for instance, put money into a tax deferred account such as an IRA to lower your AGI. The lower your AGI, the less your IBR payment, the more the government forgives of that interest, and the more of the $2700 you can put toward specific loans.
It's not like I can choose to pay nothing for the subsidized part of my loans in lieu of paying my unsubsidized part. I still have to pay the minimum payment of that, which just happens to mostly cover the interest.
Of course. Just as I said before: "subsidized loan interest would be waived beyond the fraction of $940 (or as you have now clarified, "just over $1000") that goes toward the subsidized loans." Again, it may be a small amount that is being forgiven, but there is no downside.
I think you understand now, but if you don't, I have just one question for you: Assuming you are going to pay $2700 per month regardless of the payment plan (which is what we've been saying this entire time), try and come up with one reason that IBR could ever be anything but beneficial, or at the worst, neutral?
