I must said I am biased towards debt-free plans. I am not saying that they are easy to accomplish or that another plan could be slightly better from a mathematical perspective. However, I believe there is a strong behavioral component in personal finances, and that getting in debt is a riskier.
According to the provided data, the student loans carry an interest of approximately 5.4% (a weighted average of 2.7 and 6.7). Short term investment vehicles (such as CDs, money market accounts and e-saving accounts) had returned under 6% on the last 5 years. So even if you don't consider taxes, you are not keeping up with inflation, and you have not accounted for the risk of having a lost of income during the duration of the loan. You would get a better return by paying off your debts than by keeping them.
About paying rent for 7 years, Adrienne is right it; is a long period, but my estimate was really conservative. I assumed that income doesn't increase and that there is no intensity on getting to the point to be financially free, which can reduce considerably the period considered. The 100% down payment is for the ones that are really intense about not getting in debt again, and have the chance to pay nothing (living with parents) or a cheap rent. A 15 year mortgage could be the answer, reducing the amount spent in rent.
I believe that in the bottom line, we are all for wealth building. My argument is that you should try to do things on sequence and by harnessing the power of focus, first paying off debts, then building an emergency fund, then buying a house and starting investing for retirement, instead of trying to do all at the same time.
Pat
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