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Author: TMFRunkle Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 311074  
Subject: Re: Student Loans Date: 4/8/1998 11:01 PM
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<<The scenario: I have amassed $34,000 in student loans at %7.75 interest. Add an additional $4,000 at 5%, and my situation grows bleaker (more bleak?).>>

Your interest rates are relatively low. I would consider paying the student loans off on schedule rather than avoiding investing altogether. Many of us feel any loans below 8% should be paid on schedule and not accelerated. The reason is you have a good chance of getting better returns than that if you invest the extra funds. By the way, that $4,000 you owe at 5% is below the risk free interest rate from treasuries. Is it a "teaser" rate for a short period? If so, you may want to jump on that before the rate goes up. Otherwise, I'd just pay that on time too.

Of course, you have to look at your own situation. If being in debt makes you uncomfortable, by all means pay it off. Also, if you have concerns about future cash flows or employment, you will want to pay off the debt too.

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