I have student loans. I have always made on time payments. I stopped paying during the pandemic.
If I refuse to pay my student loans when payments restart, and they go to a debt collector, how much interest and fees are normally added to the balance? Would my total balance stop generating interest? Could it be cheaper long term to go this route and pay the debt collection several hundred dollars every month?
No, defaulting on your student loans is one of the worst financial moves you can make. You'll continue to accrue interest, but you'll also face fees - then interest grows on top of that. Defaulting for a year will probably see your loan balance grow upwards of 10-20%, if not more.
By the time it gets to a debt collector, you're going to be seeing a loan easily 30-100% more than you started with. And any negotiation of the balance is going to basically get you back where you started.
Then, realize you trashed your credit. So everything else in your life will cost you more - bigger security deposits, deposits required to get a cell phone or basic utilities, higher insurance rates, even losing job opportunities.
In our decade of helping people with their loans, student loan default is literally the worst thing you can do to your finances. And there is no way that you'll end up in a better place financially in the end - even a decade later you'll be recovering from this choice.