@RhythmKats: Hey, finally did some math for you. Looks like $300/month on a $30K loan at 3.25% costs you about $4,922 over 9.7 years, until it's finally paid off. Paying all $8K onto the principal and then continuing to make the $300 payment the following month would reduce the total interest to about $2484 over 6.8 years. You save $2,476, and three more years of hassle, with a lump-sum payment.

If you choose to invest the $8K instead of using it for a loan payoff, it'd only make sense if you made more money on that investment than you "lose" by not paying down your loan over the same time period. So then what's the annual simple interest rate on $8K that would get you to at least $2,476 in 9.7 years? By my calcs, it's [(8000+ 2476)/(8000)]^(1/9.7) - 1, which is 2.82%. I'm told that's a really low interest rate for an investment in something like an index fund; if you get a higher return, you end up with more net worth at the end of 9.7 years even if you just make the $300 monthly payments.

Furthermore, just doubling your monthly payment to $600 with future income has the same effect in terms of saving you money on the loan; you only lose $2184 in interest, and are done with the loan in 4.5 years.