<p>If I were you, I would go for the program with the bigger interest reduction at the outset. The problem with the principal reduction for 30-consecutive ontime payments is twofold:</p>
<ol>
<li><p>If one payment is late, you lose the deal. It's possible for payments to be "late" through no fault of your own -- even if you have arranged for autopayment -- sometimes mistakes are made and money isn't transferred as it should be, or credited when it should be. So I'm wary of benefits like this -- they can be easily lost. </p></li>
<li><p>You may want to prepay your loan or consolidate loans -- and then you would lose that benefit. For example, lets say that 2 years out of college you get a great end of the year bonus at your job -- you think, cool -- you can pay off all your loans.... but 30 months hasn't gone by, so you never get that 3.33% principal reduction you were promised. An interest rate reduction will give you the benefits of reduced cost from the beginning -- so to me, that's the better deal.</p></li>
</ol>