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Sorry, going to reformat and post in the finance forum for specific advice.
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Minimizing impact if PSLF goes sour
- Thread starter legobikes
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deleted480308
Don't forget to add the tax on the "taxable income" for the forgiveness in your "pslf works" calculations
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We should have a better idea of what changes will occur (and I'm sure they will--it's just a question of who gets impacted) later this Fall, when the first cohort will be eligible for forgiveness.
At that time you may decide to pay everything you can to make those loans disappear ASAP, or pay just the minimum.
As long as you reapply for IBR on time (and thus keep your interest from capitalizing), there's zero benefit to paying down the accumulating interest. It doesn't save you any money if PSLF disappears, and if PSLF does disappear now you've paid more than you need to. The better choice (unless you pay the loans down aggressively) is to save or invest that money. That way if PSLF does disappear, then you can put all that money towards PSLF. You balance would be the exact same had you paid the accumulating interest. But if PSLF stays you now have a nice chunk of money in savings/stock market/etc, that you could convert towards retirement.
I also want to add tho the above poster referencing PSLF forgiveness- currently PSLF is not taxable. It is the IBR/PAYE/REPAYE forgiveness that is.
At that time you may decide to pay everything you can to make those loans disappear ASAP, or pay just the minimum.
As long as you reapply for IBR on time (and thus keep your interest from capitalizing), there's zero benefit to paying down the accumulating interest. It doesn't save you any money if PSLF disappears, and if PSLF does disappear now you've paid more than you need to. The better choice (unless you pay the loans down aggressively) is to save or invest that money. That way if PSLF does disappear, then you can put all that money towards PSLF. You balance would be the exact same had you paid the accumulating interest. But if PSLF stays you now have a nice chunk of money in savings/stock market/etc, that you could convert towards retirement.
I also want to add tho the above poster referencing PSLF forgiveness- currently PSLF is not taxable. It is the IBR/PAYE/REPAYE forgiveness that is.
