PSLF, 10-Year, or Pay It Off Fast?
Put the same monthly budget into each strategy. Whatever doesn’t go to the loans gets invested. Then compare where you stand, in today’s dollars.
These are example numbers. Answer a few questions and every calculator fills in with yours, saved in this browser.
Your loans
RAP on joint AGI, recalculated each year as income rises
Your budget
Every strategy spends exactly this each month. What isn’t a loan payment is invested.
After 10 years, in today’s dollars
PSLF leaves you $308,921 ahead of paying it off fast
PSLF on RAP
$1,500,751
Net worth in 10 years
- Payment now
- $3,844/mo
- Loans end
- Forgiven in 7 yr
- Forgiven, tax-free
- $363,391
- You pay (today’s $)
- $323,998
10-year Standard
$1,167,012
Net worth in 10 years
- Payment now
- $5,805/mo
- Loans end
- Paid off in 10 yr
- Forgiven
- $0
- You pay (today’s $)
- $616,668
Pay it off fast
$1,191,830
Net worth in 10 years
- Payment now
- $15,000/mo
- Loans end
- Paid off in 3 yr 2 mo
- Then freed up
- $15,000/mo
- You pay (today’s $)
- $536,280
PSLF on RAP
$1,500,751
- Now
- $3,844/mo
- Loans end
- Forgiven yr 7
- Forgiven
- $363,391
Pay it off fast
$1,191,830
- Now
- $15,000/mo
- Loans end
- 3 yr 2 mo
- Then freed
- $15,000/mo
10-year Standard
$1,167,012
- Now
- $5,805/mo
- Loans end
- 10 yr
- Forgiven
- $0
Big numbers are net worth in 10 years, today’s dollars.
Net worth, year by year
Investments minus loans, today’s dollars
| Point | PSLF on RAP | Pay it off fast | 10-year Standard |
|---|---|---|---|
| Now | −$500,000 | −$500,000 | −$500,000 |
| 2 yr | −$183,602 | −$180,547 | −$183,071 |
| 4 yr | $138,516 | $150,674 | $140,688 |
| 6 yr | $467,734 | $489,579 | $472,649 |
| 8 yr | $1,125,056 | $836,199 | $814,252 |
| 10 yr | $1,500,751 | $1,191,830 | $1,167,012 |
PSLF’s lead over paying it off fast
| Investment return | 84 payments left | 120 left |
|---|---|---|
| 4% | +$250,273 | +$104,470 |
| 6% (yours) | +$308,921 | +$158,964 |
| 8% | +$377,919 | +$223,730 |
Net worth difference at 10 years, today’s dollars.
Why today’s dollars matter
A dollar you pay in year 9 is worth less than one you pay today. PSLF spreads smaller payments over 7 years, so in today’s dollars it costs $323,998, less than the $354,226 it adds up to on paper.
If one of you leaves PSLF work after 3 years and switches to paying fast, you end about $17,700 behind; after 5 years, about $26,700 behind.
Educational estimate. RAP payments rise 3% a year with income; investments earn a steady 6% after tax; today’s dollars use 2.5% inflation. PSLF forgiveness is tax-free and requires 120 qualifying payments while working for an eligible employer.