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Pay off student loans within 3 years or stretch them 10 years and qualify for public service loan forgiveness?

I will have about 50,000 in student loans at the end of my doctoral program. The public service loan forgiveness requires 120 consecutive payments before the government pays the remaining portion. I could stretch the loan 10 years and qualify for loan forgiveness or make the necessary sacrifices to pay the loan in full within 3 years.

Asked by:chuckbell

  • kiara posted: 18 Jun at 7:12 pm

    Why should taxpayers money sort out your mess? There’s a recession on ya know?

  • NotAnyoneYouKnow posted: 21 Jun at 5:21 am


    The interest saved by paying the loan off in 3 years will more than make up for any amount forgiven by your employment in a public service profession.

    If you were already planning for a career in public service – good for you – and far be it for me to discourage you from pursuing that path.

    If you weren’t sold on a career in public service – don’t forget that the private sector pays far more in almost every instance.

    I love numbers, so let’s look at an example:

    Paying off $50,000 at 6.8% interest over 3 years will require a monthly payment of $1539. After you make 36 of those whopping payments, you will have repaid $55,414 – which is only $5,414 in interest.

    Paying off that same $50,000 at 6.8% over 10 years requires a monthly payment of only $575. On the other hand, you’ll pay $69,048 in total – that’s $19,000 in interest – and 14 grand more than you’d pay on the 3 year plan.

    Your decision to participate in the public service forgiveness plan will not save you $14,000. Your decision to make the payments in 3 years will. If you can afford to make $1500 monthly payments – that’s the far better option.

    Good luck!

  • jiayo23 posted: 24 Jun at 3:44 pm

    to add to the second post, if you go with the public service loan, you are limiting yourself to available places to work (i.e. you can’t work at a private business) and this can affect how much you are making. Taking the gov’t job to stretch your loan payments to 10 yrs may pay a lot less than a private company would.

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