Can you defer student loans to start a company?

https://news.ycombinator.com/item?id=73609

by rcs • 19 years ago

12 24 19 years ago

news.ycombinator.com

I'm $150,000 in student load debt and desperately want to leave my soul crushing 9-6 coding job. Can you defer student loans to start a company?

chaostheory2• 19 years ago

what's your interest rate? if you can get a good interest rate and have it locked, then why not?

right now my 30k loan is locked at 2.86% - it's lower than inflation (I think)

mrtron• 19 years ago

Plus the interest on student loans is usually tax deductible.

inklesspen3• 19 years ago

How the heck did you get it locked at such a low rate?

chaostheory2• 19 years ago

lets just say the dotbomb helped a lot... so if we do have another bubble - there will be always be a bright side

rms2• 19 years ago

The back of the Economist says yearly inflation is 12% and it's 40% for food.

mxh2• 19 years ago

Those numbers don't pass the smell test; Interest rates (e.g. mortgage rates) are nowhere near 12%, so if those figures are accurate, all sorts of lenders are paying you to take their money. Additionally, and FWIW, I've been obsessively tracking my spending for the past 6 years, and have seen little if any signs of inflation. My grocery bills from 2003 are indistinguishable from those from 2007. (Yes, I'm a geek.)

I might be willing to buy a 12% number for inflation under some conditions, since there are lots of ways to calculate that number, and an emphasis on Gold/Oil prices and/or exchange rates might cough up a 12% figure. I'd still consider it unrealistic unless you were heavily involved in such things. However, the 40% for food seems fantastic, meaningless, or both.

ed3• 19 years ago

Clearly those numbers are wrong -- otherwise a $5 loaf of bread today would've cost us about $.95 in 2002 (and about $.18 in 1997).

I believe the historic average rate of inflation in the US is closer to 2.5%.

trekker7• 19 years ago

I guess if you do, be careful, because if the startup doesn't work out you'll be even more in debt.

mattmaroon• 19 years ago

Yes, you can.

imsteve• 19 years ago

have to do anything special?

iamelgringo• 19 years ago

It depends if you have private loans or federal.

You can typically ask for 3x 6 month "hardship" deferments on Federal Stafford loans on top of your 6 month grace period after you graduate. And, those deferments are re-set if you go back to school for a semester. So, theoretically, you could take 18 months worth of deferment and then go back to school for a semester, drop out, and take another 18 months of hardship deferment.

There are also repayment programs available to you if you have limited income. At lest a few years ago, there was a type of repayment program where you could pay a fixed percentage of your income for 30 years, and then your loans were considered paid in full. I remember reading about a Rhode Island School of Design film student who got a $150,000 film degree. That's the repayment program that she was in, so she could make ends meet and still pursue her art.

Now, if your student loans are to private lenders, that's a whole different ball of wax. They usually aren't as understanding.

inklesspen3• 19 years ago

Wow, how did you get that far in debt? Law or medical school?

PStamatiou• 19 years ago

sounds about right for a decent university..$40k * 4-5 years

inklesspen3• 19 years ago

There are plenty of public universities that are just as good as private ones. I only pay about seven grand a year for tuition, fees, and books.

http://www.mnsu.edu/campushub/programs/coa/0708/index.html

hello_moto• 19 years ago

I don't understand why you're in college at the first place. College educates you to make a good decision and you're not sucking any of those information obviously.

I'm surprised you stayed THAT long (with 150k debt) at school. Obviously you're not into "schedules", "rules", and "disciplines".

rcs• 19 years ago

What are you talking about? I was in school for 4 years flat.

colortone• 19 years ago

you can do it for federal loans for 3 years

private loans usually have a 6 or 12 month limit

call your lenders

it's a simple process, especially for federal.

Can you defer student loans to start a company?

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