If you made your life completely miserable for six months and only paid down 4k of debt over that time (less than 1k/mo.),
It's bold to assume I was paying less than $1,000 per month towards my loans. Your calculation ignores how much 6.8% interest is on $148,000 ($834/month).
I actually went back and looked at my payments. I actually paid aggressively from only January to April (four months). And in that time I paid $5801, or $1,450/month. Not bad when my gross monthly income (post-taxes) is $2650.
*Note: I was paying towards individual loans. So I knocked out a $2,500 loan with a high interest rate, and that is why I was able to get my principal down $4,000 in just four months.
I don't see how you ever expect to FIRE, even with gaming REPAYE, so it seems all to be a moot point.
I'm not trying to be rude here, but you've argued against my plan this entire thread without providing any mathematical evidence to support your constant criticism. It's all been "I wouldn't do this, as paying my debts is important to me." All I care about is the math.
With that in mind, in case there's any newcomers to the thread, I'll summarize: REPAYE reduces my student loan payment to $190/month. I'm now taking the remainder of that $1,450/month that was going towards loans (so $1,260) and putting that towards FI. I'm sending $500/month to 401k, $100/month to traditional IRA, and the rest to an Ally account.
My FI accounts (without including returns) are therefore increasing about $1,260 per month. My student loan is increasing about $650/month (more on that later). In the meantime, I at least have that cash available (strong believer in "cash is king") and my assets and time in the market are increasing.
(Side note: Just bought a house and closing on it November 5. Being on REPAYE not only allowed me to save for my down payment, but having a lower monthly payment via REPAYE reduced my debt/income ratio and allowed me to qualify for the loan...wouldn't have happened on traditional 10 year repayment).
These savings, in turn, reduce my AGI. And the lower the AGI, the lower my student loan payments. And the lower my student loan payments, the more my savings rate increases.
And in the meantime of all of this, the government subsidizes 50% of unpaid interest. So earlier I said my loan is going up about $650/month. Well come April the government will chop half of that off. So my balance is really only increasing $325/month, or $3,900 per year (which is where I got the $4,000 number from in my earlier post).
As life goes on and income increases, the importance of keeping AGI low incentivizes me to have great financial behavior--I will increase 401k contributions, increase traditional IRA contributions, increase HSA contributions, increase 529 contributions, on and on.
And if I make too much income? Well, then I'll be making $150-200k/year, then Christ, having too much income is a great problem to have.
If I reach this point (i.e., the point in which my income is high enough that it's not worth doing REPAYE) in five years, my loans will have increased to about $163,000. My FI accounts (7% rate of return) would be at $74,000. And if I reach this point in ten years, my loans will have increased to about $183,000. My FI accounts (no rate of return) would be at $177,000.
Bottom line: doing REPAYE is a temporary hedge that allows you to build up assets. You should use it because the worst case scenario is that you make too much money, and 10% of that money (actually less than that) will go to your loans.In other words: given the above bolded sentence, you should consider maybe that you're doing something wrong (REPAYE being irrelevant to that sentence), and it may be time to approach something differently. :)
I agree: the one thing I need to do is increase my income. Luckily I've had some great exchanges on here with other attorneys and am set to open my own law firm within the next year or so.
And if income increases to the point that REPAYE isn't worth it, then damn, that's a good problem to have.