{"id":17654,"date":"2025-01-09T15:59:16","date_gmt":"2025-01-09T21:59:16","guid":{"rendered":"https:\/\/www.fitbux.com\/articles\/?p=17654"},"modified":"2025-01-09T21:58:46","modified_gmt":"2025-01-10T03:58:46","slug":"pay-off-or-ibr","status":"publish","type":"post","link":"https:\/\/www.fitbux.com\/articles\/pay-off-or-ibr\/","title":{"rendered":"Should You Pay Off Your Loans or Pursue Forgiveness Now That SAVE Is Gone?"},"content":{"rendered":"

For years, the SAVE plan made student loan forgiveness a no-brainer for many borrowers. The payments were so low that keeping your loans and planning for forgiveness seemed like the obvious choice. But with SAVE going away, the student loan landscape has shifted\u2014and so has the decision-making process.<\/p>\n

Now, millions of borrowers are left wondering: Should I switch to PAYE or IBR? However, focusing on that question first is a mistake. The real question isn\u2019t about which repayment plan to choose. It\u2019s about whether loan forgiveness is even the right path for you\u2014or if paying off your loans might save you more in the long run.<\/p>\n

This is one of the most critical financial decisions you\u2019ll make. And getting it wrong could cost you tens of thousands of dollars.<\/p>\n

In this post, we\u2019ll explore two real-world examples to help you make sense of this new reality\u2014one for regular loan forgiveness and another for PSLF.<\/p>\n

Sarah\u2019s Story: From Forgiveness to Paying Off Loans<\/strong><\/h3>\n

Sarah had been pursuing regular loan forgiveness on the SAVE plan. Her monthly payment was $350\u2014far lower than the $1,250 she would have paid on the standard 10-year plan. Because SAVE freed up an extra $900 each month, forgiveness seemed like a no-brainer.<\/p>\n

But with SAVE gone, Sarah\u2019s payment under IBR was set to increase to $850. Initially, her primary concern was whether she should choose PAYE or IBR. However, after speaking with a FitBUX Expert, Sarah realized she was asking the wrong question.<\/p>\n

Instead of continuing to pursue forgiveness, Sarah decided to focus on paying off her loans. Why? Because paying off her debt faster would allow her to free up cash to invest sooner. In the long run, this decision would leave her nearly $100,000 better off than if she stayed on the forgiveness path.<\/p>\n

To make this work, Sarah adjusted her short-term priorities and committed to paying off her loans in just five years instead of ten.<\/p>\n

John\u2019s Story: Rethinking PSLF<\/strong><\/h3>\n

John was in a different situation. He had been pursuing Public Service Loan Forgiveness (PSLF) for three years, with seven years to go before his loans would be forgiven.<\/p>\n

With PSLF, John would save about $10,000 compared to paying off his loans over ten years. But there was a catch: his monthly payments were about to jump significantly.<\/p>\n

For John, the uncertainty of staying in a nonprofit role for seven more years was a major concern. What if he wanted to change jobs or his circumstances shifted? The potential savings no longer seemed worth the risk.<\/p>\n

Ultimately, John decided to prioritize paying off his loans.<\/p>\n

How to Decide: Rules of Thumb vs. a Holistic Plan<\/strong><\/h3>\n

So, how do you decide whether to pursue forgiveness or pay off your loans? There are two main approaches: a general rule of thumb and a more comprehensive financial plan.<\/p>\n

General Rules of Thumb<\/strong><\/h4>\n