Is it worth applying for student loans? Should you bother with borrowing money for school?
It’s not a secret that many students are in debt when they graduate from college. It’s also common knowledge that student debt is never only a couple of hundred bucks. I actually wanted to share something with you guys first.
Check out this interesting stat from the College Board:
By the time the typical graduate walks across the stage to pick up his diploma, he owes $22,700.
This stat is really scary. At first glance at least. You can then turn around and argue that the over 20 grand in debt could be used as leverage to earn you a job earning money you never could’ve imagined. There’s more to the story. The topic of paying for college is an interesting one.
Where am I going with this? I wanted to jump into the thought of student debt being considered “good debt.”
Let’s look at if student debt is good debt… I’ve narrowed this discussion down to two key questions.
Will you use your degree?
This is a rather ambiguous question. Some of us will use our degrees for a few years until we find a much more fulfilling position in an unrelated field. Some of us will attempt to follow our passions to start an online business. Others are going to college for the experience and networking aspect. Many of us are forced to attend college by our parents. For how long and how do you think you’ll use your degree?
It’s difficult to classify student debt as good if you’re not even sure if you’ll find a job after college. You’ll only trap yourself in a job you hate because you’re forced to pay off your massive amount of student debt.
Do you need to finance through debt?
Realistically most of us will not even attempt to pay for college any other way than through debt. This is a major problem. There’s so much “free money” available to us through scholarships, bursaries, grants, etc. Then of course you can work to pay for college as you go along. There are two points you need to consider as you debate over financing your college education through debt:
- Work load. I know people in science programs that don’t even have enough time for a morning coffee. Then there’s people in lighter programs that have all of the time in the world. If you have time then why not get out there and make some money? You may not pay off all of your school bills but you’ll certainly improve your financial situation.
- Ability to pay back debt. If you find yourself with a guaranteed job after college or if you’re certain that your field of work will pay you well, then using debt as leverage can be a great investment here. If you plan on earning below $50K for many years post-college, then you really can’t consider student debt to be any good at all.
Is student debt really good debt?
Should you be applying for student loans?
Student debt is good debt if you absolutely NEED to use debt to pursue your degree. I’m not talking about those that don’t feel like working or want to finance their lifestyle. I’m talking about those that have saved up money, earn decent money, are limited on time, and still want to earn further credentials. This is when I feel that student debt is good debt, not when you’re too lazy to apply for scholarships or work for your money to pay for college.
Do you think that student debt is “good debt?”
Check out my piece from last week on if good debt exists?