Student Loans – Good Debt or Bad?

It is quite common to hear discussions of certain types of debt as good debt or bad debt, with student loans often being classified as a “good” debt. There is an article on, Lesson for Students: The Best Debt is None, that indicates more and more students are finding out that student loans can often be quite bad. Michelle Singletary writes,

“Having over $100,000 in student loan debt is not fun,” wrote one reader, a new lawyer who joined me during a recent online discussion. “Do I regret going? No, but it certainly didn’t pan out the way I thought it would. I am working like a fiend, not getting paid what most people think lawyers make, and struggling daily with money and budgeting. There are hundreds, from my class alone, who are in the same boat.”

To some degree, this is a sentiment that I share as well. While my student loans were not in the six-figures, I did come to realize that attending a private college was likely not the best choice. I did not regret the decision but felt that I could have received a comparable education at a cheaper public school.

Fortunately, I was lucky to land a well paying job out of college and never felt burdened by my student loans.

Not all students are that lucky. Depending on the field of study, some graduates are finding it difficult to land a job in their field regardless of pay. That makes the thought of thousands of dollars in student loan debt rather unappealing, whether people want to call it “good” debt or not.

The article continues to discuss key points such as the fact that federal student loans are not discharged in bankruptcy and the pros and cons of using investments and/or savings to reduce the overall student loan debt. While many people will argue that student loan debt is a good debt, there is still the potential for the burden of debt to lead to financial ruin and in my opinion, that would make student loans a “bad” debt.

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