You have $40,000 in student loans at 6%. You also want to invest. Which wins? The math has an answer, and it's boringer than the internet makes it sound.
Every dollar that pays down a loan at 6% earns you a guaranteed 6% return, before taxes. Every dollar invested in stocks returns an expected ~7% long-term, but with volatility and no guarantee.
The simple rule: if your loan rate is below your expected investment return after tax, investing usually wins long-term. If your loan rate is above 7%, pay it off aggressively. A guaranteed return is hard to beat.
A 6% loan and a 6% investment return are not the same. The loan is guaranteed. The return is not.
Federal student loans come with protections private loans simply do not. Income-driven repayment plans, forbearance, deferment, interest-rate caps, and loan forgiveness options all apply only to federal debt.
Private loans are ordinary consumer debt with a degree attached. Treat them accordingly. If you have private loans above 7%, they belong ahead of investing in the queue.
IDR plans cap your monthly payment as a percentage of discretionary income. The three main ones:
Check studentaid.gov for current plan availability and terms.
If you carry student loans, here's how to sequence your paycheck:
Short answer: if your federal loan rate is below 5%, and you've already cleared steps 1 to 4 above, yes. 1 to 5% of your paycheck into Bitcoin DCA does not meaningfully slow your loan payoff and builds a long-term position while you are young enough for time to compound.
If your loan rate is above 7%, nuke the loan first. A guaranteed 7% is very hard to beat and it frees cash flow permanently once it's gone.
If you work for the government, a 501(c)(3) nonprofit, or a qualifying educational institution, PSLF forgives your remaining federal student loan balance after 120 qualifying monthly payments (10 years) on an IDR plan.
Teachers, social workers, public defenders, city employees, hospital nurses in nonprofit systems. This is the single biggest loan-math lever in the U.S. system and millions don't use it because the paperwork is brutal. If you might qualify, use the PSLF Help Tool on studentaid.gov.
The tax-free forgiveness on PSLF (unlike IDR forgiveness) makes the math dramatic. A teacher who makes $55K and qualifies can see $30K+ erased, tax-free.
Take-home: $70,000. Student loans: $40,000 at 6% federal. No other debt.
End of Year 5: roughly $25K in retirement accounts, $6K in BTC, $24K loan balance (down from $40K), and habits that compound for 30 years. Not dramatic. That's the point.
Last updated 2026-04-14