@@vinfoundation Based on the title and the content of the video, you are saying that every student should pursue loan forgiveness, which is very bad advice unless the student's debt-to-income ratio is outrageous. Loan forgiveness has very specific requirements, which will determine the life of the debtor and his/her family, including where they can work, how many hours they have to work, or having payments for no less than 10 years. And all of this, assuming that at the end of the 10 years they will get the student loans forgiven, because there have been cases where people did not qualify... To your other arguments: "If you consolidate you will have fewer loans": seems trivial to me, but ok. "You won't save money in interest by paying off your higher-interest loan": wrong, if you end up not pursuing loan forgiveness or you finally do not qualify for loan forgiveness, you will save money by paying off your higher-interest loans. Debt avalanche and debt snowball methods have been proven to work. "You have better things to do with your money than targeting your student loans": Actually, not really. We all know that students or right after graduating is when people make less essential purchases and will spend more towards materialistic stuff that may not really be needed; while later in life you will need money for kids, health care, mortgage/rent, etc... "If you consolidate you lower your interest by 0.25% with autopay". Sure, but I do not understand why you want to lower interest by 0.25% but not pay a higher interest loan (you used 7.5% as an example!!) "Paying interest before it capitalizes is not going to help": also wrong. If you pay interest before it capitalizes you will save on interest, as you will not accrue interest on the interest. So, unless you end up getting forgiveness, you will save some money by paying the interest before it capitalizes. "You accrue the same amount of interest whether you consolidate or not (by ending your grace period)": Wrong. During your grace period you do not accrue interest on the interest, while if you consolidate, you will. Using the example that you used with the 7.5% interest, the effective annual interest if you end your grace period and do not pay your interest will be 7.76%, which increases by more than the 0.25% that you claimed you could save with autopay.
This is just terrible advice
Thanks for watching. Please tell us what we're missing and we're happy to update and improve the VIN Foundation Student Debt resources.
@@vinfoundation Based on the title and the content of the video, you are saying that every student should pursue loan forgiveness, which is very bad advice unless the student's debt-to-income ratio is outrageous. Loan forgiveness has very specific requirements, which will determine the life of the debtor and his/her family, including where they can work, how many hours they have to work, or having payments for no less than 10 years. And all of this, assuming that at the end of the 10 years they will get the student loans forgiven, because there have been cases where people did not qualify...
To your other arguments:
"If you consolidate you will have fewer loans": seems trivial to me, but ok.
"You won't save money in interest by paying off your higher-interest loan": wrong, if you end up not pursuing loan forgiveness or you finally do not qualify for loan forgiveness, you will save money by paying off your higher-interest loans. Debt avalanche and debt snowball methods have been proven to work.
"You have better things to do with your money than targeting your student loans": Actually, not really. We all know that students or right after graduating is when people make less essential purchases and will spend more towards materialistic stuff that may not really be needed; while later in life you will need money for kids, health care, mortgage/rent, etc...
"If you consolidate you lower your interest by 0.25% with autopay". Sure, but I do not understand why you want to lower interest by 0.25% but not pay a higher interest loan (you used 7.5% as an example!!)
"Paying interest before it capitalizes is not going to help": also wrong. If you pay interest before it capitalizes you will save on interest, as you will not accrue interest on the interest. So, unless you end up getting forgiveness, you will save some money by paying the interest before it capitalizes.
"You accrue the same amount of interest whether you consolidate or not (by ending your grace period)": Wrong. During your grace period you do not accrue interest on the interest, while if you consolidate, you will. Using the example that you used with the 7.5% interest, the effective annual interest if you end your grace period and do not pay your interest will be 7.76%, which increases by more than the 0.25% that you claimed you could save with autopay.