Ask HN: Founders with commitments and student loans, how is it? | Hacker News Reader

Ask HN: Founders with commitments and student loans, how is it?

7 pointsbarnettx6 comments

A bit of context: college junior majoring in CS, have always been interested in tech and startups. As an international student, I'm projected to graduate from college at $300k USD in debt. I attend a US state school so I'm already on the lower end of cost of attendances for international students. International student loans also have high interest rates of ~10%. My age is atypical for a college junior as I'm already in my mid-20s. I somewhat agree with "22 and 32 you are in your best startup years" in https://www.ycombinator.com/library/4d-a-letter-to-college-students having felt a drop in energy in the last few years.

Post-graduation I have two options: 1) Founder route in my mid-20s with my loans. If things don't work out, then big-tech/SWE it is to pay off the debt. When I chatted with a YC partner, this is what they mentioned as common though I think most cases are US citizens who can defer loans/lower interest rates/smaller debts so I'm questioning how well it applies to my scenario.

2) Work at startups/big tech to pay off debt in 4-5 years. Founding in my early 30s, ~32. I'm sorta already going down this path, been lucky to secure internships.

I'm inclined to 2) but wanted to hear from folks who tried 1) since it isn't such a well-carved path. Founders who started with student loans or existing personal commitments, did you just convince yourself of a different perspective/become more comfortable with debt or was it too stressful to bear. Part of me thinks that every founder has some level of pre-existing commitment, so this mountain of debt is just an excuse.

I'm acutely aware that personal finance and how one deals with debt/commitments is a personal matter but am curious to hear the perspective of any who were in similar situations.

Do not go the founder route right out of school, no way - not only does it put you at extremely high risk, you also have zero industry experience at that point. And with the changes coming in the industry, "I'll work big tech later" is not a guaranteed path. While you can find well-known anecdotes of success of people who went straight from school to doing their own thing, far many more fail. Keep in mind that VCs are not your friends - you are a lottery ticket to them, as in they don't care whether you personally succeed, as long as one of their investments succeeds enough to cover all of you that fail.

Go the 2nd route - get the most money you can, pay off all your debt, get enough experience to actually know what to do in this industry, and then start something on your own.

I'm so sorry you fell into this debt trap.

At this point you can't afford to play around with a startup. Most likely the startup will flop while the 10% interest never lets up and destroys you. You need to start making money yesterday.

Second "yesterday." How is OP so casual about this? $300k at 10% interest is crippling for a new grad, especially a slightly older one. Just the interest is $30k a year. Every year! Just to tread water! This is a debt emergency of staggering proportions.

If you're a junior, you should already have marketable skills. You need to start earning something ASAP, even if it's applying to every scholarship under the sun. I don't know why/how you're taking for granted that you'll even be hirable in a big tech company right out of school, especially making enough to cover an extra $30k+ in loan payments every year.

The interest depends on the loan terms, right?

300k over 30 years is ~21k in interest per year. Over 10 years its ~17.5k a year.

But yeah, that's a lot. I'm curious how one racks up $300k at a state school. I just checked a few state schools in New York and their out of state tuition is ~7k a year?

$300k is enough to have gotten a degree from the most expensive private school in the US (Harvey Mudd).

But to answer the OP: absolutely do not start a company. Get a job and pay your loans off.

I wouldn't look at it as "Should I get a job, or risk starting my own thing?". Even though this has been super common for years, it overlooks how much work even the most basic legitimate operation is in 2024.

It isn't always a choice. Many founders have trecherous failure in their backstory. Seems to be two consistent themes that drive people to do it.

1] "There is this problem / opportunity gnawing at my brain, and I MUST go do that. I must."

2] "I have literally no other choice and I will not die."

I did a startup with dependents and debt.

The logic was simple - there were no decent jobs around and every startup I joined couldn't figure out how to make money. Eventually I did sell the company after a year, but we slingshot our careers ahead with that experience.

It's an option if you can't get a decent job, which may be the case in this climate.

I did contracting before that, but it's the least efficient way to make money. It's only decent if you're a 10x being offered a 2x salary or so and need to make use of that extra productivity.

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