My goal in posting is to establish a principle -- how to calculate the value of private sector v. public sector job opportunities under PSLF.
I think not only do you need to calculate the financial outcomes associated with private v. public over a 10-year period but also the probabilities about the assumptions involved. Like you very well may know that public sector with PSLF is a better option but that is only true if all goes to plan. Using a very crude example, if where you are working now is x (x being your financial situation in 10 years time) and the hypothetical public sector job is twice the value, or 2x but the probability of 2x is less than half as likely, it isn't worth it assuming risk-neutral/averse preferences. I'm not saying public or private is riskier than the other, just saying, defining a
successful outcome over another outcome isn't worth much if you ignore the probabilities involved. Not saying you are doing that now but just a reminder. If you really want to get nuts, you could do some hard-core proportional hazard modeling but I digress as Occam's razor comes into play.
As for the negative externality bit, yeah sure, I won't disagree fully about the theory behind public service and associated relief programs but:
-if there were a prospective public service attorney with your EXACT skill set with say, 30k in debt because for whatever reason he or she didn't borrow as much, the "public" would prefer that option because the public won't have to pay for that person's forgiveness due to the ratio of debt to income.
-I don't think PSLF was designed for attorneys or workers with incomes above whatever median or average you want to use but do whatever works for you if it is allowed.
-the program may be rewarding people who borrow as much as possible and penalizing those who made more rational* financial choices on the individual level during college. i.e. What incentive does a person have to borrow less during college when IBR (and thus, PSLF) becomes more salient as your debt level is higher relative to your public service income?
*-if you actually planned on PSLF going into college or post-undergrad and decided to borrow an amount so you would have a favorable IBR repayment compared to alternatives, I guess that is rational on some level even though it has a sour taste associated with it.
On a semi-aside, couldn't you assume that in the next 10 years if you stayed private, it is highly likely you will be employed for at least 5 full year equivalents? If so, and adding ~50k in interest for a total of 200k, couldn't you pay back 40k/year (optimizing the repayment schedule and extra payments of course) fairly easily in years/periods you make over 100k? I'd imagine the odds are that you could be student debt free in a quicker amount of time than 10 years which has not only great psychic benefits to you (less amount of real time with debt lingering over your head is a good thing, plus some people really get off on accomplishing things but the same could be said for "accomplishing" PSLF as well), but you also just saved the public a lot of money.
Further thread drift: does PSLF have an adverse affect on your FICO score? What do the discharged loans look like on your credit report? Can the big 3 tell the difference between PSLF and a magical windfall that seems to happen after 10 years of student loan payments? Does this make you look like more of a risk as a borrower? It could be non-consequential but I have no idea.
Good luck!