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Ask HN: Should I pay student loans?

4 points by spencerchubb 4y ago

Does anyone have insight on how likely it is that student loans will be canceled? Should I consider not paying and instead invest the money?

toomuchtodo 4y ago
What are your balances, interest rates, and minimum payments on the debt? From there, we may work backwards to optimize based on interest costs and the possibility of debt cancellation in the future.
matt321 4y ago
The rich people are in charge. If forgiving your debt is in their best interest it will happen. Spoiler: You should pay your loans.
al_borland 4y ago
Pay your loans. Just live as cheap as possible, throwing everything you can at them until they're gone. Then you can move on with your life instead of leaving them hanging over your heard hoping for someone else to do it for you. Once the loans are gone you'll have more free cash to invest.
- FeaturelessBug 4y ago
  For many people there is no "paying off your loans until they are gone"- there is just: making payments until you are dead.
  - al_borland 4y ago
    That's a mindset issue.
- verdverm 4y ago
  This is not good advice, it depends on interest rates. i.e. if I can earn more interest than the cost of the loans, it makes sense to pay them off as slowly as possible.
themodelplumber 4y ago
The options seem kind of dichotomous. What about developing your own risk framework for this? Perhaps you do both, but in a given proportion and timeline, for example. It seems like something you also could simulate with code and some research into sentiment around the probability of blanket loan-forgiveness. No opinion here except at that general level. Good luck to you.
cableshaft 4y ago
The most that is likely to get forgiven anytime soon, if ever, is $10k (that's all that Biden has sorta kinda maybe promised he'd do at some point). If you've got more than that, keep making payments. If you've got less than that, you should probably still keep making payments (or at least go back to paying them when the deferments end).
lordkrandel 4y ago
Spoiler: do not get a student loan. Don't get loans or debt at all before you have any kind of income. Avoid college and study on your own. Try and get into a program, or migrate to a place where you can live free from debt slavery.
harptone 4y ago
While student loans still have deferred interest, just put the money you would be putting towards your loans into a high-yield savings account. If the loans get cancelled, you'll have a bunch of money in a savings account that you can invest with, if you'd like. If loans don't get cancelled, you'll have a bunch of money in a savings account that you can use toward your loans.
muzani 4y ago
I did this once. Then all my friends did it after I explained the mechanism. After a while, I realized it was rather morally reprehensible (they later froze low interest student loans) so I paid off the loans. They gave a "discount" on repayment a few months after, but by then I paid it off. I don't know what the moral is, but I'm the kind of person who feels good about paying more taxes.
tomcam 4y ago
As someone who actually pays taxes, and who avoids being in debt, I’d sure like it if you did. Do you think when someone signs a contract with you that they should adhere to it?

4 points by spencerchubb 4y ago

Does anyone have insight on how likely it is that student loans will be canceled? Should I consider not paying and instead invest the money?

toomuchtodo 4y ago

What are your balances, interest rates, and minimum payments on the debt? From there, we may work backwards to optimize based on interest costs and the possibility of debt cancellation in the future.

matt321 4y ago

The rich people are in charge. If forgiving your debt is in their best interest it will happen. Spoiler: You should pay your loans.

al_borland 4y ago

Pay your loans. Just live as cheap as possible, throwing everything you can at them until they're gone. Then you can move on with your life instead of leaving them hanging over your heard hoping for someone else to do it for you. Once the loans are gone you'll have more free cash to invest.

FeaturelessBug 4y ago
For many people there is no "paying off your loans until they are gone"- there is just: making payments until you are dead.
- al_borland 4y ago
  That's a mindset issue.
verdverm 4y ago
This is not good advice, it depends on interest rates. i.e. if I can earn more interest than the cost of the loans, it makes sense to pay them off as slowly as possible.

themodelplumber 4y ago

The options seem kind of dichotomous. What about developing your own risk framework for this? Perhaps you do both, but in a given proportion and timeline, for example. It seems like something you also could simulate with code and some research into sentiment around the probability of blanket loan-forgiveness. No opinion here except at that general level. Good luck to you.

cableshaft 4y ago

The most that is likely to get forgiven anytime soon, if ever, is $10k (that's all that Biden has sorta kinda maybe promised he'd do at some point). If you've got more than that, keep making payments. If you've got less than that, you should probably still keep making payments (or at least go back to paying them when the deferments end).

lordkrandel 4y ago

Spoiler: do not get a student loan. Don't get loans or debt at all before you have any kind of income. Avoid college and study on your own. Try and get into a program, or migrate to a place where you can live free from debt slavery.

harptone 4y ago

While student loans still have deferred interest, just put the money you would be putting towards your loans into a high-yield savings account. If the loans get cancelled, you'll have a bunch of money in a savings account that you can invest with, if you'd like. If loans don't get cancelled, you'll have a bunch of money in a savings account that you can use toward your loans.

muzani 4y ago

I did this once. Then all my friends did it after I explained the mechanism. After a while, I realized it was rather morally reprehensible (they later froze low interest student loans) so I paid off the loans. They gave a "discount" on repayment a few months after, but by then I paid it off. I don't know what the moral is, but I'm the kind of person who feels good about paying more taxes.

tomcam 4y ago

As someone who actually pays taxes, and who avoids being in debt, I’d sure like it if you did. Do you think when someone signs a contract with you that they should adhere to it?