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Comment by westpfelia | Hacker News Reader

It sure hurts me. My student loans are pegged to the federal interest rates. I went from like 4% to as of today nearly 10%

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Something to note is that Federal student loans are paused. I've wondered if the government can resume requiring payments without causing a massive recession.

Payments are paused, but does interest still accrue?

No.

If you’ve been setting aside what you would have paid while the interest was frozen, you could have a decent little pile that should insulate you for a while. I have friends who said the pause is approaching a point where it’s more valuable to them than the cancellation at this point.

I’m not saying that’s definitely the case for you, and I’m guessing you’ve already thought about this, but figured I would throw it out there. Sorry you have to stress about this.

> I have friends who said the pause is approaching a point where it’s more valuable to them than the cancellation at this point.

How is this possible?

If the amount of accrued interest that's been avoided by the pause is greater than 10k, I presume.

I get that, of course, but the only paused/forgivable loans were subsidized, which have known and non-predatory interest rates... so that means they accrued hundreds of thousands in student loan debt... my question remains "how?!"

I always figured the "x00K in student debt" stories were people who took out a lot of non-subsidized loans and let interest accrue for years.

Can you get those loans for grad school/dental school cause my girlfriends dental schooling was over 100k a year so easy peasy if so.

I guess if it’s simply paused forever instead of forgiven you don’t have to pay tax on the forgiven amount?

Student loan forgiveness is limited to $10k.

Turning off the interest for a few years has no upper bound as to how much it can benefit someone. Someone with large principal amounts can easily see more than $10k of benefit.

Anyone who was on a repayment plan that cancelled the loans after a certain period (PSLF: https://studentaid.gov/manage-loans/forgiveness-cancellation... ) has had the clock ticking even as they've paid nothing during that time; each payment "skipped" is money in the bank.

And that doesn't count the people who have paid no interest during the period, the interest amount is gone forever for that time; which could quickly overstep the $10k "forgiveness" that is being talked about.

The money saved on not having to pay interest is not inconsequential and they’ll never have to pay those months. That’s money that never would’ve helped with the loan.

Same with my HELOC.

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