# Is a bunch of debt now better than distributed debt in the future in terms of paying less in the long run?

This might be too theoretical but it popped into my head this concept for attending University/College. If you had the ability to choose one of the following which is best in terms of you paying smallest over time?

• Cram an entire diploma into a single year and take on 30K in debt
• Distribute your diploma into 3 years taking on 10K in debt the first year, 10.5K in second, 11,025 in third (a rise in tuition by 5% per year)

Let's say immediately after graduation you get the same job and it increases every year by 2%. When the second option graduates it is making the same as the first option (i.e both are making the same amount 4 years from today). Both offer a 2.75% interest rate after graduation and both offer the same loan term after graduation (i.e 10 years after grad). Of course there is a lot of other factors but is there a right option given a certain circumstance? What if one of the constants like pay or loan term changes? What if the first option actually costs slightly more like 31K?

• Are you asking "How do I calculate loans and interest rates?" Commented Mar 1, 2021 at 20:00
• If you can get a job making \$50k and earn \$100k over the course of years 2 and 3 instead of going to school during those years then you are ahead by \$100k minus your loan. I think the interest rate is insignificant when compared to your earning power. Commented Mar 1, 2021 at 20:02