What would you do?

[CrazyPhuD]

So I'll give an honest response. The no 1 question is what does your wife want to do? If she equally enjoys the jobs that would allow her to forgive her loans then you go to step two. But if there's a risk that she wouldn't like those jobs screw it and choose option 1. Happiness is way more important than 10k.

However if she would like to do the jobs that as much as her other options, then the questions comes, what are the odds she'll get the loan forgiveness. I see two major risk factors. First, government pulls funding for the program. Personally given the need for qualified teachers and the number of retirements expected this one is probably less. BUT it is always a risk now. The question is when are you likely to know if the funding is going to get cut. If you find out right before year 5 then that would suck because you paid the most. But if you find out in say 6 months, then the opportunity cost would be less since you'd only have 6 months of 'extra' interest offset by the money you earned saving it. So the question is when do you think you'd find out if the program is cut. Personally I think the risk is greatest in the next 6 months and likely tails off after that(unless our economy is really ****ed at which point all bets are off).

Second point, are there any other factors that would prevent her from completing the 5 year requirement? Given you list your age as 29, do you have kids now? DO you think your wife wants to have kids in the next 5 years? If so do you think she would go back to work after(it is by no means assured).

Really we could spend a lot of time going over the economics, but the answer is likely simplest. As your wife which combination of job/savings makes her happiest, extra job stress to save 10K probably isn't worth it.