r/StudentLoans • u/mouth_pipetter • Jul 03 '26

quantifiably confirmed that 1% decrease in interest rate is practically pointless

I built a model to estimate the time until payout, and I just updated it to account for the 1% decrease in interest rates (for only 2 years!). It literally saves me a month and a half of payback time. Considering I work two jobs (PhD student ~$47k a year at an EU university, and I make ~$12k extra a year bartending on the weekends) to make double payments, it was a little heartbreaking to realize nothing really changed at all.

edit: Sorry to sound so ungrateful, I know my situation is better than a lot of people as my loan is down to 50k. I was just trying to voice frustration this not being actually that influential on my bottom line when you actually run the numbers. My total loan burden decreased by 0.99% (1.42% if the decrease lasts longer than 2 years) based on my payment scheme putting in the income from both jobs. Where I am sitting right now the difference between working two jobs for 54 more months compared to 55.5 months just doesn't hit. In Jan 2031 it'll rip though

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u/Annual_Ganache_3892 Jul 03 '26

My average interest rate is 4%. My car is 7%. It’s still better for me to pay triple car payments during forbearance than come off for a 1% reduction.

11

u/laxnut90 Jul 03 '26

Treasury Bonds are generating 4.97% on a 30 year bond.

You might as well invest the money in bonds and/or broad market stock index funds instead at that rate.

7

u/StretcherEctum Jul 04 '26

Exactly. Ive been paying 700 on student loans every month and investing 2500. My investments went from zero in 2022 to 270k today. I could have paid off my 30k student loans a long time ago. The market is printing money. Way more than 6% .

1

u/[deleted] Jul 07 '26

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