I recently graduated with a PhD in mathematics and its time for me to pay back my student loans. Being a mathematician, I sat down and did the math. I realized two things:
There is no feasible investment which I can make that will adequately compensate for the amount of interest I will pay over the life of my loans.
Theoretically, the way to minimize the total cost of the loans is to make very large payments on the highest interest loan until it is repayed and then move on to the next highest interest rate.
Given 1., I decided that the smartest financial move for me at this time is to make the largest payment I can afford on the loans. So now I'm focusing on trying to pay off my loans as quickly as possible, with as little cost to me as possible. Of course, the payment plan 2. is not an option, since I am required to make payments on all the loans. So I proposed the following for myself:
Choose a payment plan which minimizes monthly payments. Then pay very large amounts on the loans with the highest interest rates until they are payed off...and work my way down the list.
Now I'm certainly not a financial wizard by any stretch of the imagination, and there may be things here I am overlooking. So here's my question:
Is there anything in my proposed plan that could cause issues for me in the future? Any possible fees? Strategies I have not considered?
Any advice would be greatly appreciated.