Are Student Loans Really Good Debt?

By on March 6, 2013 No Comments

Last week in our article about good debt and bad debt, we mentioned student loans as an arguably good debt. Today we’ll take a closer look at student loans and make sure the price is really worth the cost.

There is an underlying assumption made about higher education. That assumption is that you need a degree to get a good job, and, complimenting that, that if you have a degree, it will be pretty easy to get a job.

This was absolutely true when baby boomers were going to school. They graduated with little or no debt and were welcomed with open arms into entry-level positions at companies where they could move up the corporate ladder and earn a respectable income over their working life.

Oh how things have changed. Graduating without debt is a near miracle, and certainly not the norm, as the over half of all grads expect to have more than $20,000 in debt, with many anticipating over $40,000 in debts.

But at least they’ll have those great university-level jobs paying high salaries to help them pay it off right?


Recent grads are shocked to find that in many industries jobs simply aren’t there. More and more companies are switching to part-time workers in an effort to cut costs, and others are demanding unpaid internships as a way to get your foot in the door.

At some point you have to look at the situation and see that higher education is not the sure-thing it was before.

If the cost keeps going up and your likelihood of securing a well-paying job to pay it off in a reasonable time is going down, do you really have to go? Or, more applicably worded for this blog – should you go into debt to go to school?

Maybe there are other options. If you aren’t lucky enough to be able to simply afford tuition without debt, why not start those unpaid internships straight out of high school? Learning on the job, in many cases, will teach you more about your desired field than school will. Plus you’ll have 4 years of experience when others your age are just graduating.

Colleges are moving more and more towards online learning. Institutions like the Khan Academy are working tirelessly to make education free, and as technology gets better and better, the idea of sitting in a dusty classroom listening to someone talk at you and giving you a test at the end seems laughably inefficient.

We’re not telling you that you shouldn’t go to college. What you SHOULD do is question your assumptions when it comes to the costs and benefits that college offers. Do a bit of digging and, find some people who are successful in your desired field who didn’t choose the traditional path.

Don’t follow the sacred cow that says student loans are always a good idea.


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