Can you defer student loans to start a company? | Hacker News Reader

Can you defer student loans to start a company?

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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?

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

Yes, you can.

have to do anything special?

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.

That seems accurate to me. There is also another class of postponement you can apply for if you don't get a deferment, which is called a forbearance. Generally it involves calling the loan servicer and asking nicely. The main difference is that interest will still accrue with a forbearance.

Here's an example: https://www.acs-education.com/CS/Jsp/loanoptions/ffelForbear...

That one even has an online application form for the "Financial hardship" forbearance which is basically the "I just don't feel like paying my loan right now" option.

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)

Plus the interest on student loans is usually tax deductible.

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

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

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

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.

Where do you live? Here in Seattle, prices on basic food items (dairy products, especially) have gone up by at least 30% in the past two years.

I don't know if my overall grocery bills are lower or higher since 2003 (on a quality-adjusted basis), but I know that my overall cost of living has increased significantly.

Also: mortgage rates have (unfortunately) little to do with the current inflation rate. It's not really fair to say that a current inflation statistic is wrong because the lenders have lost their minds....

I live in Silicon Valley. My spending is actually down slightly from 2003 - that mostly appears due to minor lifestyle changes (eating out less, turned off cable) but is certainly incompatible with rampant inflation. Cost-of-living looks basically flat. I shop at the same grocery store (Draegers .... Mmmmmm) that I did in 2003.

On the other hand, I have noticed a spike in the office vending machine snack prices (to $.80/item!) and, of course, gas looks to have roughly doubled. But neither of those are big expenses for me.

At the risk of engaging of contradiction, that 30% number doesn't jibe with my data whatsoever.

Have to disagree that current mortgage rates have little to do with current inflation rates. Additionally, inflation is such a tricky thing to measure (because the prices of different things fluctuate with respect to one another, and through time, all the time - I can give you a (bad) argument that we're experiencing massive deflation by looking only at the prices of 100GB HDs) that it seems entirely fair to me to point out that someone's inflation statistic is incompatible with the behaviour of many, many people who are paid to get this sort of thing right.

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%.

OK, I misinterpreted their commodity-price index. However, it is a leading indicator of inflation and as that, it seems more reasonable.

No, you actually want the _other_ CPI (consumer price index).

Historical TTM: http://inflationdata.com/inflation/Inflation_Rate/Historical...

The CPI is influenced by the political winds (e.g. right now, it rather heavily weights technology items, and down-weights fuel and food costs, which are experiencing much greater price inflation). The commodity price index might just be a better indication of actual inflationary pressures for real people.

As it affects the short term, that's a good point. I'd make the argument that CPI is a better long-term indicator but over enough time the two indexes should show the same average rate of growth.

Timr: just out of curiosity, what start-up are you working for in Seattle?

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

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

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

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.

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".

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

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