Don't you have to assume you're using that money on the principal to otherwise invest? If so, can you beat the 6% interest rate + inflation?The pause on federal student loan payments has been extended to Sept-30. Interest will not accrue in that period.
You could pay on the principle and reduce your overall amount paid, if you wanted.
Another way of looking at it is given inflation and the future value of money it might be better to just leave it be until mandatory payment resumes.
In my case, I should have started repaying the loan on 6/2020. So if I took full advantage I'd have, at minimum, 15 months of deferment.
I'm not good at the math. At 6% interest do you think it makes more sense to take todays money and put it to principle, or to make the final payments in 10 years+15 months?
Seems obvious that over one year, inflation will not catch the 6% interest rate. But I don't know how that scales across the full 10 years.
I'm looking at it from the perspective of the 'buying power' difference of the money used to pay off the loan, when one loan is originated on 6/2020 and the other is originated on 10/2021 and both loans start with the same principle amount and interest rate.
If you don't factor in investing the money, one would think paying off the loan now is better than paying it off 10 years from now. Yes, $1000 today will be worth less than $1000 in 10 years, so in essence it will be "cheaper" to pay it off in 10 years. But you also have to figure when the clock starts again in October 2021, it will be at its current value. In contrast, interest on current value - 9 months of payments will be less, and in a compounding fashion.