

Can you defer student loans to start a company? - rcs

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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trekker7
I guess if you do, be careful, because if the startup doesn't work out you'll
be even more in debt.

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mattmaroon
Yes, you can.

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imsteve
have to do anything special?

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iamelgringo
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.

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Goladus
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...](https://www.acs-
education.com/CS/Jsp/loanoptions/ffelForbearance.jsp)

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.

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chaostheory
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)

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

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mxh
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.

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timr
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....

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mxh
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.

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

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

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inklesspen
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>

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colortone
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.

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hello_moto
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".

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

