This presentation is designed for the 44M Americans with student loans. It provides a comprehensive overview of student loan repayment options from pausing payments to income-driven repayment plans and refinancing. It also demonstrates how to objectively evaluate different repayment options and gives tips on how to think about repayment in the context of other financial objectives and decisions.

1. Last Updated: August 1, 2018
The Ultimate
Guide to Student
Loan Repayment

2. 2
Introduction
! Why did we make this deck?
• Over 44M Americans have outstanding student loans exceeding $1.5T "
• The average student loan debt for Class of 2017 graduates is almost $40K
• Almost 2 out of 3 millennials with a college degree have student loans, and a majority of
all millennials in America believe student loan debt is a major financial problem
• Despite the severity of the issue, most borrowers are not prepared to deal with their
debt and pay far more than they need to in the long run #
• Our goal is to bring clarity to student loan repayment and help millions of Americans
save billions of dollars $

3. 3
Disclaimers
! So we don’t get sued…
• We are not financial advisors and do not offer or claim to offer financial advice, and this
document should not be considered financial advice
• We have verified the information in this presentation to the best of their ability; however,
we are not liable for any inaccuracies (if you see any errors, please let us know)
• We are also not responsible for any damages that may occur while following any of our
recommendations
• This presentation provides simplified terms and conditions for many programs–please
consult the official terms and conditions to see more information
• This document can be freely shared with others, but should not be modified in any way

4. 4
Table of Contents
1. Student Loan Basics
This section explains how interest works, overviews the different types of loans, and clarifies the
benefits of specific types of loans like Direct Loans and subsidized loans.
2. An Overview Of Your Options
This section covers all of your repayment options from deferment to income-driven repayment plans
and refinancing.
3. Evaluating Your Options
This section shows you how to objectively evaluate different options using the Student Loan
Repayment Calculator.
4. Parting Thoughts
This section provides a few final suggestions and recommendations.
5. Questions and Feedback
This section provides ways to provide feedback and gain assistance.

5. 5
1Student Loan Basics

6. 6
How Interest Works
Principal Interest
Total Balance
What you borrowed The “cost” of borrowing
! Interesting Rules:
• Interest accrues every month using this equation:
!"#$ %&'$ℎ)
# *"+"',- ×
/''0"+ 1'$-2-#$ 2"$-
12 %&'$ℎ#
• Interest is always paid first
• If your payments don’t cover interest, your interest may be capitalized–i.e. your
interest is added to your principal and you pay interest on your interest "
• Interest capitalization is relatively common–for example, interest that accrues on your
unsubsidized loans while you’re in school or in your “grace” period gets capitalized
when they enter repayment #

7. 7
Example Calculations
Starting
Balance
Before
Interest
+ Interest = Starting
Balance
- Payment = Ending
Balance
Month 1 $10,000.00 $41.67
(10,000 %
05 '()*+*,) +-)*
12 /0()ℎ,
)
$10,041.67 $106.07 $9,935.60
Month 2 $9,935.60 $41.40
(9,935.60 %
05 '()*+*,) +-)*
12 /0()ℎ,
)
$9,977.00 $106.07 $9,870.93
Although the borrower paid more than $106 towards her
loans, she only made a $64 dent in her total balance thanks
to interest !.
Example loan calculations with $10,000 Loan at 5% annual interest:
While different plans have different
required minimum payments, the
calculation for calculating interest and
balance over time is exactly the same.

8. 8
Federal Loan Programs
Different loan programs have different benefits and features, so it’s important to understand what
types of loans you have
William D. Ford Federal Direct
Loan Program (“Direct”)
Federal Family Education Loan
Program (“FFEL”)
Federal Perkins Loan Program
(“Perkins”)
Lender U.S. Department of Education Private companies (e.g. Sallie Mae) School
Need-Based No No Yes
Started 1992 1965 1957
Ended – 2010 2017
Products Stafford Loan
• Subsidized
• Unsubsidized
PLUS Loan
• For graduate/professional students
• For parents
Consolidation Loan
• For loans made to student
• For loans made to parents
Stafford Loan
• Subsidized
• Unsubsidized
PLUS Loan
• For graduate/professional students
• For parents
Consolidation Loan
• For loans made to student
• For loans made to parents
• Perkins
All Perkin loans are subsidized

9. 9
Direct Loans vs. FFEL and Perkins Loans
Direct Loans may give borrowers access to additional income-driven repayment plans and Public
Service Loan Forgiveness
Pro Tip: You can consolidate your FFEL and Perkins Loans into a Direct Consolidation Loan if you want to
access the unique benefits of Direct Loans.
Exclusive benefits of Direct loans:
• Pay As You Earn Repayment Plan (PAYE)
• Revised Pay As You Earn Repayment Plan (REPAYE)
• Income Contingent Repayment Plan (ICR)
• Public Service Loan Forgiveness (PSLF)

10. 10
Subsidized vs Unsubsidized
Subsidized loans have many advantages compared to unsubsidized loans
Pro Tip: Because of the clear advantages of subsidized loans compared to other types of student loans,
prioritize paying off unsubsidized loans first.
Condition Subsidized Unsubsidized
In School Interest does not accrue Interest accrues
Grace Period Interest does not accrue Interest accrues
Deferment Interest does not accrue Interest accrues
Forbearance Interest accrues Interest accrues
Payments Do Not Cover
Interest
Unpaid interest does not accrue
3 year limit for IBR, PAYE, and REPAYE; After 3
years, 50% benefit on REPAYE; no benefit under
other plans
Unpaid interest accrues
Only 50% of unpaid interest accrues under REPAYE;
no benefit under other plans
! "
!
"
"
"
"
!
!
"

11. 11
Tax Benefits of Student Loans
! Here’s what you should know about the Student Loan Interest Deduction:
• If your adjusted income is below $65,000 (below $135,000 if filing a joint return), you
can deduct the interest paid on qualified student loans from your taxable income, up to
$2,500–this yields a potential savings of up to $700
• Between incomes of $65,000 and $80,000 ($135,000 and $165,000 if filing a joint
return), the amount you can deduct is phased out until they are completely eliminated at
$80,000 ($165,000)
• There are several caveats to what is considered a qualified student loan, but the
summary is that it has to be a loan for school that’s used for educational purposes and
that was not made by a relative or employer
• If you are somewhat familiar with this deduction, you might have been surprised to find
that it’s phased out at a certain income–that’s because it is a new change and reminds
us to never assume laws affecting student loans will stay the same

12. 12
2An Overview of Your Options

13. 13
Options to Pause Payments
! What you should know about your options to pause payments:
• When most borrower think about pausing payments, they usually think about
deferment or forbearance–however, you can also effectively “pause” your payments by
having a $0 monthly payment on an income-driven repayment plan
• Many private lenders now offer options to pause your private loans–you generally just
have to contact them and see if you’re eligible
• For all but subsidized loans, you will accrue interest when you pause your payments,
and your unpaid interest may be capitalized when you enter repayment
• For current students: If possible, do not wait until your grace period ends to make
payments.
• For borrowers on a “paused” payment plan: Avoid having your loans balloon out of
control by paying at least the interest that accrues.

14. 14
Overview of Options to Pause Payments
Deferment Forbearance Income-Driven
Repayment
Deferment
Benefits • Pause payments
• Interest does not accrue on
subsidized loans
• Pause payments • $0 payments that count
towards loan forgiveness
• Pause payments
Eligibility
Simplified list; please see full
documentation
• Enrolled in school or a
graduate fellowship
program, or
• Enrolled in an approved
rehabilitation training, or
program for the disabled
• Unemployed, or
• Experiencing economic
hardship, or
• Serving in the Peace Corp
or military
• Facing financial difficulties
• In residency, or
• In certain teaching jobs, or
• Serving in the AmeriCorps
or National Guard
• Very low income • In school, or
• Unemployed, or
• Experiencing financial
difficulties
Limits • Varies based on benefit,
but typically 3 years
• Typically for 1 year, but can
be renewed
• Typically for 1 year, can re-
certify each year
• Varies based on lender, but
typically for 1 year
Guaranteed if
Eligible?
• Yes • Yes for certain reasons; per
lender’s discretion for other
reasons
• Yes • No–per lenders discretion
For Federal Loans For Private Loans

15. 15
Federal Non Income-Driven Repayment Plans
! What you should know about federal non income-driven repayment plans:
• Non income-driven repayment plans can be categorized as fixed (meaning monthly
payments don’t change over time) and graduated (meaning they change over time)
• The Standard Plan, which for most borrowers is a 10-year fixed plan, is the default
option and about two-thirds of all borrowers in repayment are on the standard plan
• Many borrowers whose best federal plan is the Standard Plan may benefit from
refinancing, so we do encourage those borrowers to check their refinance rates
• Graduated plans may seem attractive to borrowers who are looking for a low monthly
payment, but they are generally far more costly in the long run and monthly payments
can go up to 200% over time

16. 16
Overview of Non Income-Driven Repayment Plans
Standard
Graduated
Extended–
Fixed
Extended–
Graduated
Any Federal Loan
Any Federal Loan
At least 30K in Direct or
FFEL Loans
At least 30K in Direct or
FFEL Loans
Eligibility: Monthly Payment
Fixed
Increases Every 2 Years,
Highest Payment Cannot
Exceed 3x Lowest Payment
Fixed
Increases Every 2 Years,
Highest Payment Cannot
Exceed 3x Lowest Payment
If you have 35K in FFEL
loans and 5K in Direct
loans, you can only switch
your FFEL loans into an
Extended Plan. However,
you could consolidate all
of your loans into one 40K
Direct Consolidation Loan,
and then switch that loan
into an Extended Plan.
Term
10 Years
Up to 30 years for certain
consolidated loans
10 Years
25 Years
25 Years
Chart
Monthly Payment
on First Year
Monthly Payment
on 10th Year

17. 17
Income-Driven Repayment (IDR) Plans
! What you should know about IDR plans:
• Payments on an income-driven repayment plan are based on your (and sometimes your
spouse’s) expected annual income
• You need to recertify (i.e. prove) your income every year–if you don’t, you may be
kicked out of your plan and any unpaid interest may be capitalized
• If you have federal loans with multiple service providers, you will need to apply and
recertify with each provider
• Outstanding balances after 20 or 25 years of repayment is forgiven ", but the amount
forgiven is considered taxable income #
• If you plan on having your loans forgiven, make sure you save enough to pay the
additional tax burden–otherwise, you’re going to go from owing your lender to owing
the IRS $

18. 18
Income-Driven Repayment (IDR) Plans (cont.)
! The income-driven repayment plans are:
• Income-Contingent Repayment (ICR) – started in 1994
• Income-Based Repayment (IBR) – started in 2009
• Pay As You Earn (PAYE) – started in 2012 and considered the “New IBR”
• Revised Pay As You Earn (REPAYE) – started in 2015

19. 19
Overview of IDR Plans
REPAYE
PAYE
IBR
ICR
Direct Loans
Direct Loans
Partial Financial
Hardship
Recent Borrower
Direct or FFEL
Loans
Partial Financial
Hardship
Direct Loans
Eligibility: Term
20 Years
If repaying only undergraduate
loans
20 Years
20 Years
If new borrower as of 6/1/14
20 Years
25 Years
If repaying at least one
graduate loan
25 Years
If not new borrower as of 6/1/14
You are considered to have a partial financial hardship
if the monthly payment on a 10-year fixed plan exceeds
10% of your discretionary income.
You are a recent borrower if you
received your first federal loan
after 10/1/07 and at least one loan
after 10/1/11.

20. 20
Overview of IDR Plans (cont.)
REPAYE
PAYE
IBR
ICR
10% of discretionary
income
10% of discretionary
income
Capped at monthly
payment on a 10-year
fixed plan
15% of discretionary
income
Capped at monthly
payment on a 10-year
fixed plan
20% of discretionary
income
Monthly Payment
Monthly payment on
12-year fixed plan,
adjusted for Income
IBR for New
Borrowers
10% of discretionary
income
Capped at monthly
payment on a 10-year
fixed plan
Discretionary Income
Definition:
AGI – 150% Poverty Rate
AGI – 150% Poverty Rate
AGI – 150% Poverty Rate
AGI – Poverty Rate
AGI Includes Spouse’s
Income?
Always*
Only When Filing Jointly
Only When Filing Jointly
Only When Filing Jointly
AGI – 150% Poverty Rate Only When Filing Jointly
Lesser of: and
AGI is adjusted gross income. For
most people, it’s close to their
pre-tax income. Learn more.
* Exceptions: (1) You and your spouse are separated or (2) you are
unable to reasonably access your spouse's income information.

21. 21
Loan Forgiveness Programs
! What you should know about loan forgiveness:
• While loan forgiveness sounds great and can be for many, some borrowers may end up
paying far more pursuing loan forgiveness than just by paying down their loans faster
• The amount forgiven may be considered taxable income–this means that if you have
$50K forgiven, you may need to pay an additional $20K–$25K in taxes
• Most loan forgiveness programs require a certain number of qualifying payments, so be
careful of doing anything that will ”reset” the counter (e.g. consolidating your loans)
• For most loan forgiveness programs, qualifying payments do not have to be
consecutive
• While it’s possible to pursue multiple loan forgiveness programs at the same time, you
cannot “double dip”–for example, if you receive Teacher Loan Forgiveness, you cannot
count the years of qualifying service used for Teacher Loan Forgiveness towards Public
Service Loan Forgiveness

22. 22
Overview of Loan Forgiveness Programs
Public Service Loan
Forgiveness (PSLF)
Teacher Loan
Forgiveness (TLF)
Perkins Loan
Cancellation
Loan Forgiveness
After IDR
Direct Loans
All Federal Loans
Perkins Loan
Direct Loans or FFEL
Loans
Eligibility: Amount
100% of Outstanding Balance
After qualifying payments
Up to $5,000 or $17,500
Math, science, and special
education teachers can receive up
to $17.5K in forgiveness
Up to 100% of Original Loan
Balance
See chart on next page for more
details
100% of Outstanding Balance
After qualifying payments
Teacher in Low-Income
Area
Variety of Conditions,
See Next Page
Employed in Public
Service
120 Qualifying
Payments
5 Years of Service
5 Years of Service
240 or 300 Qualifying
Payments
Amount Forgiven
Tax-Free?
!
!
!
"
Public service includes employment in:
• Government organizations at any level
• 501(c)(3) non-profits
• Other types of non-profits that provide
qualifying public service

23. 23
Perkins Cancellation Conditions
Condition Amount Cancelled
Teacher cancellation • Up to 100% for five years of
eligible service
Full-time nurse or medical technician cancellation • Up to 100% for five years of
eligible service
Full-time firefighter cancellation (for service that includes
Aug. 14, 2008, or began on or after that date)
• Up to 100% for five years of
eligible service
Full-time qualified professional provider of early
intervention services for the disabled cancellation
• Up to 100% for five years of
eligible service
Full-time faculty member at a tribal college or university
cancellation (for service that includes Aug. 14, 2008, or
began on or after that date)
• Up to 100% for five years of
eligible service
Full-time speech pathologist with master's degree working
in a Title I-eligible elementary or secondary school
cancellation (for service that includes Aug. 14, 2008, or
began on or after that date)
• Up to 100% for five years of
eligible service
Librarian with a master's degree working in a Title I-eligible
elementary or secondary school or in a public library
serving Title I-eligible schools cancellation (for service that
includes Aug. 14, 2008, or began on or after that date)
• Up to 100% for five years of
eligible service
Full-time attorney employed in a federal public or
community defender organization cancellation (for service
that includes Aug. 14, 2008, or began on or after that
date)
• Up to 100% for five years of
eligible service
Condition Amount Cancelled
Full-time law enforcement or corrections officer
cancellation
• Up to 100% for five years of
eligible service
Full-time employee of a public or nonprofit child- or
family-services agency providing services to high-risk
children and their families from low-income
communities cancellation
• Up to 100% for five years of
eligible service
Full-time staff member in the education component of
a Head Start program cancellation
• Up to 100% for seven years (at a
rate of 15% per year for the first six
years and 10% for the seventh
year) of eligible service
Full-time staff member in the education component of
a prekindergarten or child care program that is
licensed or regulated by a state cancellation (for
service that includes Aug. 14, 2008, or began on or
after that date)
• Up to 100% for seven years (at a
rate of 15% per year for the first six
years and 10% for the seventh
year) of eligible service
Military service in the U.S. armed forces in a hostile
fire or imminent danger pay area cancellation
• Up to 50% for four years (at 12.5%
per year) of eligible service for
borrowers whose active duty
service ended before 8/14/08
• Up to 100% for five years of
eligible service for borrowers
whose active duty service includes
or began on or after Aug. 14, 2008
AmeriCorps VISTA or Peace Corps volunteer
cancellation
• Up to 70% for four years (at a rate
of 15% for the first and second
years and 20% for the third and
fourth years) of eligible service

24. 24
Consolidation
! What you should know about consolidation:
• Consolidation in the broader finance world means combining multiple loans into one
loan; In the world of student loans, consolidation specifically refers to the process of
combining one or more federal loans into a new Direct Consolidation Loan
• Consolidation is not the same thing as refinancing, and your interest rate on a
consolidated loan is the weighted average interest rate of your composite loans
rounded up to the nearest 1/8 (if your loans have variable interest rates, your current
interest rate will be used)
• If you consolidate subsidized loans with unsubsidized loans, you will get a Direct
Consolidation Loan with a subsidized component and an unsubsidized component
• You can selectively consolidate your loans (e.g. consolidate Loans A and B and not C)
• You can consolidate previously consolidated loans
• You can not consolidate loans made to students with loans made to parents

25. 25
Consolidation
! Potential Cons:
• Higher interest rate
• Loss of grace period
• Greater cost over the life of the loan
• Reset qualifying payments count for Public
Service Loan Forgiveness
" Potential Pros:
• Fixed interest rate
• One monthly payment
• Lower monthly payments
• Access to more income-driven repayment
plans
• Access to Public Service Loan Forgiveness
• Resets clock on deferment and forbearance

26. 26
Refinancing
! What you should know about refinancing:
• Refinancing is the process of taking out a new private loan, generally with more
favorable terms, to pay off one or more existing loans
• Refinancing is the only way to reduce your interest rate
• Checking your rates is free and won’t affect your credit score; therefore, we
recommend borrowers who meet the minimum qualifications to refinance to check their
rates to see if they are eligible for lower rates
• Checking your rate does not commit you to refinance
• Most lenders offer the choice of loans with variable or fixed interest rate; based on our
analysis, we predict most borrowers will do better with variable-interest loans only if
they plan to pay off their loans in 3 years or less

27. 27
Refinancing
! Potential Cons:
• Loss of federal loan benefits such as
deferment, income-driven repayment, and
loan forgiveness
• Higher cost if extending repayment term
• Unexpected increases in minimum payments
if you have a loan with a variable interest rate
" Potential Pros:
• Lower interest rate
• Lower monthly payment or lower overall cost
(and sometimes both)
• Better customer service and resources

28. 28
Federal Consolidation vs. Refinancing
While consolidation and refinancing may sound similar, they are very different
Consolidation Refinancing
Lender • U.S. Department of Education • Private financial institution
Interest Rate • Weighted average of composite loans’ interest rate
rounded up to the nearest 1/8th
• New rate based on borrower’s credit risk
Qualification • At least 1 FFEL loan or at least 2 Direct loans
(exceptions apply)
• $5,000 in student loans
• Employed or has job offer
• Good or better credit score
Unique Benefits • Potential access to more income-driven repayment
plans and Public Service Loan Forgiveness
• Lower interest rate and/or lower monthly payment
Unique Concerns • Potentially higher interest rate • Loss of federal loan benefits
Generally Best For • Borrowers with non-Direct loans who want certain
benefits associated with Direct loans
• Borrowers in good financial standing who qualify for
a lower interest rate

29. 29
3Evaluating Your Options

30. 30
Student Loan Repayment Calculator
We strongly recommend using our free Student Loan Repayment Calculator to objectively
evaluate your repayment options
Features of the Student Loan Repayment Calculator:
• Adjust over 20 assumptions impacting student loan repayment estimates
• Get cheat sheets, estimates, and interactive graphs for every repayment plan
• Download the amortization schedule for every repayment plan as an Excel or CSV
• Incorporate Public Service Loan Forgiveness and Teacher Loan Forgiveness
• Personalize interest rates for refinancing estimates
• Select specific loans to combine in consolidation scenarios
• Model different tax-filing scenarios
Open the Calculator

31. 31
Getting Started
! A few notes:
• We rely on the National Student Loan Data System (NSLDS)
to import your loans.
• Virtually everyone with outstanding federal student loans has
an account, so try resetting your password on NSLDS if you’re
having difficultly logging in.
• NSLDS may not be up to date with your most recent
payments, so you may need to adjust your numbers.
• NSLDS will not have your private loans, so you will need to
manually enter all of your private loans.
4 ways to enter your loans
4
1 2 3
Used to highlight plans by affordability; our rule
of thumb is to put 20% of your monthly income

32. 32
Incorporating Loan Forgiveness
! A few notes:
• You can run the calculator multiple times to evaluate the
impact of a loan forgiveness program.
• For certain borrowers with high levels of debt, it may make
make sense to take a job in public service vs. a higher paying
job in the private sector due to PSLF.
• For teachers: Sometimes TLF will be better and sometimes
PSLF will be better. Run the numbers in both scenarios to see
what option is better for you.
You can select among no loan forgiveness,
PSLF, and TLF. If you select TLF, you will
further have the option to select between
$5,000 or $17,500 in loan forgiveness.

33. 33
Specifying Assumptions for Income-Driven Repayment
! A few notes:
• Income-driven repayment plans have complicated rules, so
we require the information on the left to more accurately
crunch the numbers for you.
• You can play around with different scenarios to see how your
estimates might change.
• Don’t know how much your wage will grow every year? It’s
okay to guess because you can always come back in a few
months or a few years and re-run your numbers with different
assumptions.

34. 34
Setting Expected Interest Rates
! A few notes:
• We estimate expected interest rates based on credit score,
but your actual interest rates will almost certainly be different.
• When you have rates for different loan terms, update it here.
• Checking your rates does not impact your credit score, so if
refinancing seems like a good option based on your results,
we strongly recommend at least getting one quote.
• We have a list of recommended lenders in the next page.

35. 35
Where To Get Refinance Rates
Open the Ultimate Guide to
Refinancing Student Loans
! Pssst…we wrote a pretty comprehensive guide to
refinancing student loans, so you should check that out
• Lending platform that lets you request
quotes from hundreds of non-profit credit
unions and banks with just one application
• Interest rates as low as 2.76% (Variable),
3.15% (Fixed)*
• No service, origination, or prepayment fees
• Lending platform that lets you retrieve rates
from 11 major lenders using one application
• Interest rates as low as 2.57% (Variable),
3.09% (Fixed)*
• No service, origination, or prepayment fees
• Well-funded student loan refinancing
division of SouthEast Bank that’s some of
the lowest interest rates we’ve seen
• Interest rates as low 2.69% (Variable),
3.09% (Fixed)*
• No service, origination, or prepayment fees
• Biggest student loan refinance lender with
several unique benefits like career coaching
and networking opportunities
• Interest rates as low as 2.63% (Variable),
3.25% (Fixed)*
• No service, origination, or prepayment fees
Check Your Rates on LendKey Check Your Rates on Credible
Check Your Rates on SoFiCheck Your Rates on ELFI
* Note: These rates change over time

36. 36
Your Results
Different types of loans are
eligible for different plans and
terms, so we will automatically
group them by type.
Consolidation may give you different
plans and terms, so we also show you
your estimates under consolidation.
Your loans are color coded by
affordability. Need to change
your budget? Click the
”Show” button on the Input
tab, go back to the first tab,
and resubmit.
Estimates for each plan are
clearly shown, and you can
rearrange the order by term
length, monthly payment, total
paid, and amount forgiven.

37. 37
Learning More
Click on an icon to see cheat sheets,
interactive graphs, and downloadable
amortization schedules.

38. 38
Example Scenario: Private vs. Public
Situation
Ashley has $50,000 in student loans with an average weighted interest rate of 7.125%. She
also has 2 job offers: one with private company that pays $55,000 annually and another
with the government that pays $45,000. If she chooses the government job, she expects
to qualify for Public Service Loan Forgiveness. Clearly, the private sector job has a higher
salary, but is it more valuable than PSLF?
Solution
• Ashley runs two scenarios in the Student Loan Repayment Calculator: (Scenario 1) $55,000 salary
and no loan forgiveness program applied and (Scenario 2) $45,000 salary and PSLF applied.
• She notices that the monthly payment for the Standard Plan on Scenario 1 is $584, and she would
pay about $70K in total.
• She also notices that the monthly payment for REPAYE on Scenario 2 ranges between $223 and
$323, and she would pay about $32K in total. PSLF would forgive nearly $50K of her loans.
• The difference between Scenario 1 and 2 is $38K. She knows that her student loan payments would
come from her after-tax income, so to pay $38K in student loans, she would need to earn nearly
$54K (assuming a combined marginal tax rate of 30%).
• Ashley expect that her income to grow roughly 3.5% every year in both jobs. So over 10 years, she
calculates she would earn nearly $117K more in the private job. This is clearly much higher than the
the value of PSLF. Indeed, as an A+ student, she calculates the breakeven point where a private
sector salary offsets the value of PSLF is about $50K.

39. 39
Example Scenario: Paying More
Situation
José has $100,000 in student loans with an average weighted interest rate of 8.5%. He
earns $90,000 annually and wants to pay off his loans as fast as possible. He’s interested
in refinancing, but isn’t sure if its worth losing federal benefits.
Solution
• José inputs his information into the the Student Loan Repayment Calculator and notices that
refinancing to a 5-year 4% loan seems like his best bet–he would pay just $10K in interest if he
refinanced and almost $49K in interest on the Standard Plan.
• He is impressed by the potential savings, but to confirm the default 4% rate is realistic for him, he
checks his rate and is happy to find out that he qualifies.
• However, he knows that he wouldn’t just pay the minimum ($1,240 per month) on the Standard
Plan. Instead, he would pay the same amount as he would on the 5-Year Refinance Plan ($1,842).
To calculate the financial impact, he downloads the amortization table for the Standard Plan in Excel
and models paying $1,842 instead of $1,240.
• He notices that by paying more on the Standard Plan, he would pay off his loans in 51 months faster
and pay $27K in interest. While these results are better than paying the minimum on the Standard
Plan, he would still be paying almost 170% more in interest by not refinancing.
• José was willing to a forgo some savings to maintain federal loan protections, but not $17K!

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Example Scenario: Life Changes
Situation
Chad has about $300K in student loans with an average weighted interest rate of 8%. He
will start his medical residency next month and expects to make about $54K in his first
year. He wants to get married to his fiancé who makes $70K annually, but he’s concerned
about the implications on his student loan payments. After he completes his residency, he
expects to earn about $200K annually. Chad wants to understand how life changes will
impact his repayment estimates.
Solution
• Chad creates three scenarios in the Repayment Calculator: (Scenario 1) he is single, (Scenario 2)
he is married but files separately, and (Scenario 3) he is married but files a joint return.
• He noticed that while PAYE and REPAYE had the exact same starting monthly payments, if he
married, his monthly payments under REPAYE would increase by an unaffordable 217%, regardless
of how he filed his taxes.
• Realizing that PAYE was the best plan for him as a resident and married man, he looked at how his
options would change after he completed his residency. To do this, he used the amortization table to
see what his remaining balance would be in 3 years.
• Then, he went back to the Input tab and entered that value in the “Current balance” field under “Use
aggregate values.”
• He noticed that while PAYE was likely the best plan for him as a resident, if he stayed on PAYE
beyond his residency, he would be paying over $200K more in interest and taxes compared to other
plans. He immediately scheduled a note to change his repayment plan in 3 years.

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4Parting Thoughts

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When In School
! Here’s a few things recommendations for current students:
• Don’t wait to pay down your unsubsidized loans–they will grow while you’re in school
and during your grace period
• If you have high interest loans, prioritize improving your credit while in school–a few
points off your interest rate could save you thousands of dollars
• Understand that for every $1,000 you borrow, you will likely need to earn $1,300–
$1,800 to pay it off because: (1) you earn pre-tax money and pay with after-tax money
and (2) interest accrues

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Student Loan Repayment and Investing
! Here’s a few things to consider when thinking about paying down debt vs
investing more:
• The long-term return of the S&P500 is between 7-10% (depending on what you
consider long-term)
• Basically, this means that when you pay down debt with a lower interest rate, you are
forgoing a few percentage-points of return from the market
• However, debt–especially student debt–creates stress, so forging a 1–2% net return
might be worth the lower stress
• As a rule of thumb, we suggest that you prioritize paying down any debt with a 6% or
higher interest rate
• For example, if you have two loans, one at 8% and one at 5%, pay off the 8% loan as fast
as possible, then pay only the minimum on the 5% loan and invest what you would have
otherwise made in additional payments
• If the alternative to not paying down debt is spending (vs. investing), prioritize paying
down debt

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About Refinancing
! Here’s a few things to consider when thinking about refinancing:
• Goldman Sachs predicts about 25% of borrowers can benefit from refinancing, yet less
than 2% of this group actually does so
• Why? Ignorance is one of the big reasons (you don’t have that excuse anymore ") and
so is fear of losing federal benefits
• Programs like deferment and income-driven repayment can be great for some people,
and you might pay a premium to have these options in the future; however, you should
assess exactly how much this is worth to you
• We recommend asking yourself: How much am I willing to pay to have federal loan
benefits? How much will I forgo by not refinancing?
• If your savings from refinancing is less than what you would ”pay” to have federal
benefits, then you should probably not refinance. However, if they are, then you
probably should.
• For example, if you would save $2,000 by refinancing and you value your federal loan
benefits at $1,000, you should probably refinance.

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5Questions and Feedback

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Ways to Contact Us
! To Learn More or Get Help:
• Check out maxrewards.co
• Contact us at support@maxrewards.co
" Feedback:
• We aim to bring clarity to millions of borrowers, and we need your help to do it
• Help us help others by providing feedback