The High-Income Student Loan Priority Stack
- Step 1: Capture 100% of employer 401k match (100% guaranteed return — always first)
- Step 2: Build emergency fund to 3 months (prevents loan disruption from crisis)
- Step 3: Refinance student loans if rate exceeds 5% and income is stable
- Step 4: Aggressively pay down loans over 6% while maintaining minimum retirement savings
- Step 5: Resume full retirement contributions once loans are paid
Refinancing Strategy at $150K Income
At $150K income with strong credit (750+): some lenders offer rates as low as 4.5–5.5% on 5–7 year refinanced student loans. The rate reduction from 6.5% federal to 5% private on a $60,000 balance: $16,000 → $10,700 in total interest — a $5,300 saving, worth the loss of federal protections at this income level.
Refinancing savings at $150K income — 7-year term, 1.5% rate reduction
| Loan Balance | Federal Rate | Refinanced Rate | Monthly Payment (7yr) | Total Interest Savings |
|---|---|---|---|---|
| $40,000 | 6.5% | 5.0% | $571/mo | $3,600 |
| $60,000 | 6.5% | 5.0% | $857/mo | $5,300 |
| $100,000 | 6.5% | 5.0% | $1,428/mo | $8,900 |
Carrying $60,000 in student loans at 6.5% for 10 years instead of paying off in 3 years (using extra income at $150K): $8,800 more in interest. But that $60K paid off in 3 years could have been earning 7% in a Roth IRA over the same 10 years: foregone investment growth = approximately $47,000. The opportunity cost of student loan payoff vs. investing is a legitimate calculation at this income.
Optimize Your $150K Student Loan Strategy
Enter your balance and see the payoff vs. investing tradeoff — find the mathematically optimal path.