"There’s no one-size-fits-all answer to the question of whether to pay off student loans or invest. In fact, there are many factors to consider when making this decision, including your student loan interest rates, predicted returns on investment, and other financial priorities," The New York Post reports.
..."Along with building an emergency fund, for instance, it’s often a smart idea to save for retirement, especially if you can max out an employer’s 401(k) matching benefit. You may also have short-term savings goals, such as saving for a house or wedding.
'It’s certainly possible to work toward multiple financial goals at the same time,' says Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators. 'Doing so is a personal decision that will vary for each borrower.'"
..."If your loans have a high-interest rate, the cost of your debt can add up over the years. For example, a $20,000 student loan with 8% interest will cost you over $9,000 in fees over 10 years. But if you can pay it off in five years instead, you’d pay just $4,300 in interest.
'If borrowers have the flexibility in their budget, paying down student loan debt more quickly is a smart way to make a dent in their principal balance and avoid accruing more interest over time,' says Draeger."
NASFAA's "Notable Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Articles included under the notable headlines section are not written by NASFAA, but rather by external sources. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.
Publication Date: 6/28/2023