Is student loan debt “good” or “bad’ debt


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This presentation poses the question is student loan debt good or bad debt. It concludes that it can be "good" debt depending on several factors. It also proposes an idea for better handling student loans by requiring a "business plan"

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Is student loan debt “good” or “bad’ debt

  1. 1. Helpful Financial Information from National Debt Relief … Is Student Loan Debt “Good” or “Bad’ Debt? If you were ever wondering about how to deal with student loan debt, then you may want to ask yourself what got us in this situation in the first place? It is only in recent years that student loan debt became a real problem. It has crippled many new graduates and it is not getting any better. (Continued …) Brought To You By:
  2. 2. Helpful Financial Information from National Debt Relief … It is believed that new graduates today can expect to continue paying on these loans until they are in their 50s. What happened to the idea that student loans can be paid off in 10 years? Why should we spend until we are near retirement to pay back a debt that we clearly did not expect to have that much effect in our lives? How can student debt be a good debt? A lot of people have argued that student debt is a good debt. If you did not know this than, yes, there is such a thing as a good debt. The definition is simple. If you use the money to purchase an asset that will grow in value such as a house or if it will put money in your pocket, then that is a good debt. But if it only takes away from your pocket without helping you improve your personal financial wealth, than that is a bad debt. Student loans give us the opportunity to earn money by financing our college education. So it should be considered a good debt right? If it will help you get a high paying job that will give us 6-figure incomes, how can we think that is bad? How has it evolved into a huge student debt problem? It is true that this type of debt can help you secure white collar jobs that will make your earning chances better than high school graduates. However, you will find that it is still robbing you of a good future. Here are some of the things that student loans are robbing from our young adults.  They are delaying home ownership. A lot of young graduates are forced to delay buying a home because what should have gone into savings goes to pay their student loan payments. They are unable to save up for a down payment.  They are forced to move back with their parents. At a time when they should be learning financial independence, young adults are financially unable to support themselves and at the same time pay off their debts.  They are delaying life milestones. A lot of young adults are delaying things like marriage and parenthood because they cannot afford it as they have to concentrate on paying off their debts. What factors make today’s college loans a bad debt? If you think about it, the whole concept of student loans is not too bad if it can help better the lifestyle of new graduates. However, even if these loans have the best intentions, the implementation is wrong. That is what makes things a lot worse that it should be. There are a couple of factors that led to the present and student loan payments that we cannot afford. Here in our opinion are three of the most important
  3. 3. Helpful Financial Information from National Debt Relief …  This debt is being advertised as a good debt. In 2012, student loan debt reached $1 trillion. If you think that should be enough to scare us into not taking more debt that is where you are wrong. Incoming college students in the country are closing their eyes about the real scenario because student loans are taught as a good debt. As mentioned, there is some truth to that. But the current situation of new graduates should make this doubtful.  Students sign up for a debt without knowing what they are getting themselves into. We understand that college education is important but we really need to tell students about the repercussions of taking on debt before we let them sign up for a loan. Many new graduates today are saying that they would have made different decision had they known the real effects of student loans. Of course, they only found out after graduating - when the bills started coming in. By then, it was too late.  Loans are still being given despite the high delinquency rate. Current consumer debt statistics show that while mortgage and credit card debt delinquency rates are going down, student loan delinquency rates keep going up. Although this is very clear, college loans are still being made! If you know that current borrowers cannot pay back their debts, why are we still approving student loans without changing anything about the system? What we need to do is come up with a plan or a system to evaluate a student’s ability to pay back a loan. An article written by Brett Nelson and published on suggested that college applicants should present a business plan. This plan would explain how they view their education in relation to their careers. That would force the student to study the industry they want to enter and research statistics about income possibilities. It will also help them draft a plan to pay back the loan. The upside for lenders is that this would give them preview as to how the borrower will repay the loan. College education = good. Student loan debt = bad In the end, you should know that solving the student loan problem does not necessarily mean we need to stop going to college. Getting a higher education will always be a good. It is the manner by which we choose to be in debt for it that needs to be thought out further. The College Board conducted a study titled Education Pays 2013: The Benefits of Higher Education for Individuals and Society. Basically, it proves that it is necessary for students to pursue education after high school because it gives them a better chance at improving their lives. Here are some of the statistics revealed on  People with a bachelor’s degree in 2011 earned an average of $56,500. This is $21,000 more than that of a high school graduate.
  4. 4. Helpful Financial Information from National Debt Relief …  Only 18% of high school graduates (male) earn the same as one that had aa four-year college education. The remaining 84% is earning less.  College degree holders experience a faster increase in income than high school graduates.  In 2012, the unemployment rate of college graduates was 7.1% lower than high school graduates. In another study done and published on, it was revealed that four-year college degree holders earn more than 60% compared to high school graduates. Not only that but 21.8% of those living in poverty are high school graduates - a huge difference from the 5.8% of college graduates living in poverty. The bottom line is that a college education is necessary but you need to make sure that you keepstudent loan debt to the minimum by making the right financial choices. Student loans can still be a good debt but you have to make sure to borrow only what you know is enough to keep it from destroying your future. Live frugally if you can and take a part time to help with your expenses. These are only some of the ways you can reduce the chances of a less than ideal financial future. If you need help with your student loans, National Debt Relief recently launched a program that will help borrowers find a debt relief program for their student debt. They provide a consultation service that will match their specific student loan situation, employment conditions and financial capabilities with the right debt elimination program. They will also help with the paperwork that will allow the borrower to enter into such a program. They will only charge a one time flat fee that will be placed in an escrow account. There will be no maintenance fee or additional charges. They will only withdraw the payment once the borrower is satisfied with the paperwork and the debt relief program that they will be directed to. If you're struggling with student loan debts National Debt Relief has a program that can provide you with consultation services. Their trained experts will advise you about you student loan repayment options based on the type of debt that you have and your employment situation. They will even help you with the paper work involved. This service has a one time fee that will be placed in an escrow account. When you are satisfied with the service and the documentations done on your behalf, that is the only time the fee can be released. There is no upfront or recurring maintenance fee.
  5. 5. Helpful Financial Information from National Debt Relief … Does this sound familiar? • You are tired of worrying about money… • You are losing sleep due to mounting credit card debt… • You are fighting with your partner about the bills… • You are living paycheck to paycheck… • You are falling behind on your debts… • You are losing hope… It’s time to talk with National Debt Relief! Call 1-888-275-4499 Now Or Go To loans-quote-now/?src=PDFs