Evaluating Paying off Student Loan (another student loan post, long)

[mikeyKay]

I tried to "crunch the numbers" for paying off my student loan in one lump sum, or using monthly payments. I presently have the money to play it off tomorrow if I wanted to, but I wondered (on my own, and after reading some posts on this forum) if the money would be better invested. Here are the constants:

~$18,000 in student debt
5.3% interest rate
~$150 monthly payments
(days between payments)*(principal)*(5.3%/365.25) = amount paid to interest

Analysis:

My first problem was figuring out a way to analyze the system, and I still don't know if my method makes any sense. I broke it into 2 choices, I could either invest $18k and make my monthly payments to my loan, or payoff the $18k on the loan and invest my monthly payments. Does this make any sense?

Given the information it takes me 171 months to pay off the loan (14.25 years). After the 14.25 years, I dont think it matters what a paid for the loan (because in the end the loan will be nothing), the way to judge preformance is to see how much money I have invested. Again, I'm not sure if this makes sense. Soooo, after I plug some numbers into Excel, I get the following outcomes assuming various rates of return for the money invested:

% return__DON'T Payoff Loan______Payoff Loan
8%________52,064_______________51,707
9%________59,235_______________56,560
10%_______67,314_______________61,156
11%_______76,406_______________67,961

There are advantages and disadvantages to having a student loan outstanding, but in my opinion, it only makes sense to NOT payoff your loan if you can expect some nice returns on your investments.

Any feed back is much appreciated, as I am new to all this.

-mike