[krschultz]

Focus really hard on getting 3-6 months of living expenses saved up as an emergency fund. It's more important than paying back the student loans. Pay the minimums required until you have a safety net and then you can turn back to paying off debt. Interest rates are historically low, it's not worth racking up credit card debt if things go wrong.

[aianus]

This is only true if he can't get a personal line of credit or family loan at around the same interest rate as his student loans. Otherwise, it's better to pay off the debt.

Best case: he doesn't get laid off

Worst case: he gets laid off and puts the debt back on the LoC

[dmm]

If you're going to analyze the situation this way you have to take into account the risk of the credit not being available when you need it. Credit can disappear at any time and rates change. What if your parents lose their job at the same time and can no longer lend you the money? What if the credit card you were planning to use doubles its rate?

Money sitting in an insured account is as safe as anything in the world.

[aianus]

It depends on his personal appetite for risk and his family/friend situation, of course. But it almost certainly has a worse expected value to pay $100s in extra interest as insurance against somehow losing your LoC and job within months of each other.

[joncrocks]

Well indeed. You're going to need the money when you're unemployed.

People don't tend to like lending unemployed people money. Isn't that the first thing a bank's going to ask? "How is person going to pay me back?"

[aianus]

You open the LoC now, while you're employed.

In any case I've never had my bank ask for any income verification of any kind, they just take me at my word. I was surprised too.