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Should I make higher payments on my student debt, or invest and save more for retirement?

I am employed in the public sector and I earn about $45,000 annually. I have $120,000 in student debt. I am enrolled in the Public Service Loan Forgiveness (PSLF) program. My plan is to save and invest for retirement, while making the minimum payments on my student loan debt. Through the PSLF program, the balance on my loans will be forgiven in eight years (as long as I continue to work in the public sector). Do you recommend this strategy? Should I be paying more towards my debt? Or should I be contributing more towards my retirement plan?



Debt, Retirement Savings
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December 2017

As long as you are fairly certain you will remain in the public sector, and the PSLF program has informed you that your current employment qualifies, you should continue on with your current strategy. If you can have your $100,000+ loan forgiven in 8 years, that is like getting a $12,000+/year raise.  However, if you don’t think it is likely you will remain in the public sector for 8+years, and/or, if you can find a job that pays you more than $60,000 - $65,000 per year in the private sector (that you like as much or more than your current job), then it might make more sense to take the higher paying job, and pay-off the debt with your new higher salary.

November 2017
November 2017