Why Student Loans Are Not Always A Bad Thing

Believe it or not, there are some benefits of student loans.

Now you're wondering if you just read that correctly. Did he, the guy who tells you to pay off your student loans ASAP, just say student loans are not always a bad thing?

Is he implying that student loans can be a GOOD THING?

Yes – you read it correctly, sometimes student loans are actually a good thing. Student loans do have benefits.

Now you are at the point of scratching your head and wondering why I would imply student loans are a good thing, but just keep reading for a second…

Benefits to having student loans.

While it is well documented within most of my blog posts that student loans suck, there is something student loans provide – opportunity.

And while I think there is an opportunity in anything you decide to pursue, student loans can help people who may have not ever been able to go to college actually their fair chance.

Over the last few years, less and less federal funding is going to state schools and higher education. Throw in the arms race for better dorms, better food, coupled with less funding and you have higher college tuition.  

But student loans do provide opportunities for people like myself, my wife, and countless others a chance to get a college degree.

My Personal Student Loan Story

When I was 17 I applied to two colleges. West Virginia University and Virginia Commonwealth University.

I went with WVU over VCU because my best friend was going there and they had a good football team. Great logic. But it was out of state, and that meant it was going to be close to $20,000 a year.. And that was in 2005.

Letsss GO Mountaineers

My mom sat me down and said if you want to go to college, we need to be resourceful and figure this out.

She was a thrifty lady, so she made me go to the guidance office at my high school and grab every scholarship application in the office. Several nights a week we filled out applications, wrote essays, and prayed we would get a few scholarships.

My mom knew that in order to make my college dreams come alive, even with her single parent income, I was going to need to piece together some scholarships, and most likely some student loans.

When the acceptance letter came in I was awarded a $4,000 per year scholarship.  With FASFA, Pell Grants, a Work Study job and an additional $12,000 in scholarships (thanks mom for stretching me and making me apply) I was able to go to college my freshman year almost at no cost.

Related Content: A History of Financial Aid

In the next 3 years, it was just tuition – I saved up for rent every summer working in landscaping or as an intern at a local government center.

I managed to walk away with a Bachelor’s in Education and only $40,000 in student loans. And admittedly, having my degree in education has led to a great opportunity.

Which is why a college degree isn’t always a bad thing.

Andy Josuweit who founded Student Loan Hero put it like this, “for millions of people, student loans are their only hope of attending college.”

That would be the case for my wife and I.

student loans can be good

Knowing what I know now, I don’t think I would have done anything differently. Now, my wife on the other hand…

Well, that is a different story.

Truth be told, if she knew what she knew now she wouldn’t have gone to school for 8 years. Actually, even though she is brilliant, she would have probably done it all different. And there are smart ways to afford college.  

However, that being said, even with multiple 6 figures worth of student loans, she will have the ability to make more in her lifetime than most people. And that is the result of having a Doctorate in Physical Therapy.

Hindsight is always 20/20. However, according to the Bureau of Labor Statistics, the weekly median income difference between a person with no degree and a Bachelors is still $450, or roughly $23,000 more a year.

So as of now, a college degree is still very valuable. As the costs of a college education continue to rise, there could be a point where the statistics show it is actually more costly to get a degree in the long run, but that could be some time.

Student loans do help people go to college. They serve their purpose.

Is there an element of predatory lending? There is I’m sure, especially with for-profit college lending.

Is it smart to let 18 year olds take out auto loans? No, but we let them take out student loans.

Is it smart to finance a $65,000 creative writing degree? Probably not in my opinion. But ultimately student loan debt is still widely viewed as a “Good Debt.”

Related: Are Student Loans Worth It?

Good Debt & College Loans

Even though I hate the term “Good Debt,” the term refers to any debt where the value or reward is higher than the cost.

For simple brains like mine, basically, student loan debt is not bad if you walk away with a college degree and get a good job.

Not to mention, colleges also have many serendipities. Independence, social ties, critical thinking skills, learning to manage priorities, and in my particular case, establishing social circles that allowed me to meet my wife :).

I enjoyed my college experience. To this day one of my passions is West Virginia Football. And, I wouldn’t have had any of that without student loans.

With most statistics indicating that roughly 8 in 10 graduates have student loans, graduating college pretty much means most will have to have at least one student loan.

But, just because student loans might be necessary for most to graduate from college, and a college degree is still more valuable in the long run, doesn’t mean they should be thrown to the wayside and ignored.

ahh student loans
Most people on the left…

You should pay off your student loans.

Even though you statistically will make more money throughout the duration of your life with a college degree, that doesn’t mean you should slack and pay minimums.

Do you really want to make your degree an asset?

Pay off your student loan debt as fast as possible. Chuck everything you can at student loans.

Cash from weddings, money from Christmas gifts, tax returns, savings – pay it off!

Additionally, refinancing student loans is not a bad strategy, but prior to refinancing make sure you read up. For starters, consolidating loans is not always the best option.

If you are serious about getting out of student loan debt use this link to get my student loan guidebook.

The guide book is FREE and includes:

  1. Basic student loan facts
  2. Our short student loan story
  3. Worksheets to plan student loan payoffs
  4. Strategies depending on your needs

I hope you enjoyed this post and while it is sorta contradictory to my normal posts I do recognize the overall value of education that has provided my wife with our careers.

Q: In your opinion, when are student loans a good?

Josh writes about ways to make money, pay off debt, and improve yourself. After paying off $200,000 in student loans with his wife in less than four years, Josh started Money Life Wax and has been featured on Forbes, Business Insider, Huffington Post and more! In addition to being a life-long entrepreneur, Josh and his wife enjoy spending time with their chocolate lab named Morgan, working out, helping others with their debt and recommend using Personal Capital to track your finances.