Comments on: Student loans are not “good debt”

By: Alex

Alex — Thu, 26 Jun 2008 19:48:38 +0000

Not Correct, but not Incorrect. If you are planning (I was annal person from begining of college) you can take out all your loans (WHAT?!?!?) place the extra in a IRA. My loans are at 5-6% lower than any loans you can find or get with a credit card. Currenly I have more in my IRA than I owe… Plus you forget about the tax incentive so I am really only paying 4-5% in interest in the market you can make about 8%. Worse case with normal inflation of 3% you still make 1% off that money you never had!!
If your a student and think of it as free money that is INCORRECT thought. Using the money other than smart investing in yourself (School) or Future Self (Retirement) is the worst thing you can do. Try to live in the future and not today. Make a budget and stick to it is the best advise i can give without going into detail. Pay for your basic food,shelter,and education the rest will come later in life. remember life is all about PLAN PLAN PLANNING …. Life will throw curve balls but if you planned it will be better than if you did not!

By: annette

annette — Mon, 02 Jun 2008 12:47:59 +0000

Correct! Debt is not good specially if you were still studying. At early stage you have a debt!?.You are teaching yourself like not valuing money.

___________
annette

By: Anitra

Anitra — Thu, 22 May 2008 21:15:34 +0000

I want to hear more people say this. Every college student needs to be more savvy about how much they are paying for their education and where that money is coming from. Loans are OK, but they should be the last resort instead of the first. Scholarships, working (even if it means slowing down the education), and less-expensive schools should all be considered as part of the college plan.

I went to an expensive private school and didn’t really look at any of the numbers until I was done… I happened to come out with relatively little debt (thanks Mom & Dad!) but I had many friends who weren’t so lucky. They’ll be slaving away at jobs they HATE for years to come because they didn’t try to bring down the cost of their education beforehand.

Oh, and I had no way of knowing as a student that I would eventually get married and want to become a stay-at-home parent; it’s going to be a really tough thing to do because of my husband’s and my loans. If either (or both) of us had gone to less expensive schools or found other ways to finance our educations, the financial transition to parenthood would be an easier one.

By: MITBeta @ Don't Feed the Alligators

MITBeta @ Don't Feed the Alligators — Thu, 22 May 2008 16:50:23 +0000

The average college graduate earns $1 million more than a high school graduate over a lifetime. (http://www.ericdigests.org/2003-3/value.htm)

So please explain to me:

A. How student loans are not good debt.

B. @brainy: Student loans aren’t usually a good financial move

The most expensive college educations in the country don’t cost anywhere near $1 million, and even if 100% financed would still result in a net financial benefit for most.

If I could invest a few 10s of thousands of dollars in something that will result in $1 million in 30 or 40 years, I would consider it a good investment — even if I had to borrow to do it. That’s exactly what a student loan is.

By: brainy @ pants in a can

brainy @ pants in a can — Thu, 08 May 2008 13:21:55 +0000

Here, here!

I couldn’t agree with your stance more… Student loans aren’t usually a good financial move…

By: bluntmoney

bluntmoney — Wed, 07 May 2008 22:39:22 +0000

Hi Paul, I agree with pretty much everything you’re saying. In fact, that’s my point. The idea is that people shouldn’t go out and borrow up a storm for college because they’re writing it off as “good debt”. They should investigate and be really sure of what they’re getting into; what the worst case scenario would be, how they would feel if they ended up doing something totally different, etc.

By: Bouncing Betty

Bouncing Betty — Wed, 07 May 2008 20:25:08 +0000

I have to agree with Paul on almost everything he says. IF you can make it out of college on grants, scholarships, serious financial aid, great. Unfortunately, most folks can’t do that. I did take out student loans for both undergraduate and graduate school, I got great financial aid, but I needed loans to cover the rest.

I don’t consider my student loans bad debt, I do consider them an investment in my future. I was lucky, I did work in my field of study for a number of years. I know I would not have been able to get a job in my field without the college education.