Are student loans “good debt”?
Question by MochaBeansMom: Are student loans “good debt”?
Student Loan
I’m 25 years old, been out of school 4 years, and have about 27k left in student loans to pay off. I have no other debt besides this (credit debt paid off–still have one credit card I make payments on ON TIME) I am comfortable with having this debt for however long it takes me to pay it off…
I hear all the time from financial advisors, family, coworkers etc. that student loans are a “good debt” to have. What does that mean?
Best answer:
Answer by Kris
I’m 22 with the same problem. I think of it like this. Not as a Debt, but as an investment. An investment into my future. I have to be honest with you, I’m 22 years old, and this is probably the best investment I’ll ever make. It opens the doors so i can see a better tomorrow. Myself and my future family will have such a better life for a petty 30k. In four years, I’ll be bringing home 50k easy. Well worth it, keep your head up girl.
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Tags: debt, Financial Advisor's, Good Debt, Mortgages, Student Loan, Student Loans
I think good debts are debts that are sure to be repaid and bad debts are those which won’t be repaid. Hopeless ones.
Maybe thats what they’re refering to.
They might be saying that cause student loan is for education. thats always good, and after education one gets a job and pays back. So maybe they consider student loans good debt.
All debt is bad. Debt is debt.
Student loans can be the best type of debt, as long as they result in increased human capital. That means that your ability to earn additional income should justify the cost.
On the flip side, borrowing $ 40,000 to pursue a masters in social work would not be an intelligent decision, since you would likely still be limited to low income employment.
Student loans are cheap, and you can pay on them forever. Why pay off a 3-5% student loan when you can safely invest extra money at twice that rate?!!
Good debts help you build credit history and are for an investment that should increase your net worth….like a college education.