Should You Stop Paying Your Student Loans During a Crisis?

Thank goodness the government and student loan providers understand what a crazy and unprecedented time we are in.

Some loan providers are offering forbearance programs in order to help people who have lost jobs, lots wages, etc.

Some loans are offering 3 month forbearance but interest will still accrue, while other loan providers are automatically doing a 6-month forbearance with NO interest! THIS IS INSANE!

Do you realize how insane this is?

Do you think, in your life time, you will EVER see student loan providers offering 0% interest ever again?!

**Be sure to check with your loan provider as they are not all offering the same options**


I am not writing this article to tell you one way or the other if you should or shouldn't keep paying your student loans. Only YOU can decide what's best for you and your financial future.

I'm just here to give you the facts, numbers, and something to think about. That's all.

SO....let's do some math here!

We have two people, Smart Sally and Coasting Carol.

Coasting Carol goes with the flow, does what the majority does, and doesn't care that she has debt. "Hey, everyones got debt so what's the big deal?"

Smart Sally does the opposite of all the Coasting Carols. She is focused and intense in paying off debt because she knows debt only harms her financial future. She makes the smart decisions even if it means giving up some gratification in the present moment.

So both Coasting Carol and Smart Sally are still receiving their normal income - they are lucky enough to be able to work from home during this pandemic.

They both have a $25,000 loan balance with the same provider who automatically puts their loans into a 6-month, 0% interest forbearance - no strings attached.

Stops Making Payments:

Coasting Carol certainly does not want to put in the extra effort to log into her student loan provider and manually make her normal payment for the next 6 months.


At the end of the 6-month forbearance, Coasting Carol will be in the exact same spot. She'll have a loan balance of $25,000 - no harm, no foul. Right?!

Continues Making Payments:

Well...let's take a look at Smart Sally, who does make the little, tiny bit of effort to log in each month and make her normal monthly payment of $213.


By the end of the 6-month forbearance, Sally's loan balance will be $23,722!

So that means when interest and payments resume, Sally will be WAY ahead of the ball game.

She will be $1,278 ahead of Coasting Carol. With that head start, Smart Sally will end up paying off her loan 1.5 years before Carol && save over $1,700 in interest.

Now let's imagine that Smart Sally decides once all the craziness is over that she wants to increase her monthly payment by just $200 a month. She could now pay off her loan in only 6 years and save over $6,600 in interest! ** This is based on a 6% interest rate.**


Again, ALL of that was mainly dependent on the fact that they were both still receiving their normal income through the pandemic.

If you have lost a job and don’t have a huge emergency savings account, it may be in your best interest to stop paying. BUT that is something you need to decide.

You need to do what’s best for YOU.

I'm always here for you guys and we WILL come out of this better than before!

- Madison