With the economy the way it is right now, many high school graduates are choosing to enter college rather than enter the workforce. On top of that, we’re seeing many people who have been fired from their current job go back to school to further their education.
It makes sense to go back to college in order to better compete with fellow job seekers. Having a degree on top of experience may give you the edge you’ve been looking for. It also makes sense because the job market will be much better in a couple of years.
But at the same time, college is an expensive endeavor. While your unemployment checks may pay for your housing for a few months, it’s not going to help you pay for college.
For many, the only way to afford a college education is to take out student loans. Is it okay to have student loan debt? I mean, you may have heard that debt is bad, but not all debt is created equal.
Some debts are okay to have. A mortgage, for example, is a debt that is typically a low interest debt (about 6% interest rate) and it is an asset that usually goes up in value.
A car loan is another debt that is not all that bad either. While the value of a car might go down, you still need a car to get to work every morning. And your job is your livelihood, so a car is a tool that helps you generate revenue. Car loan interest rates are a little higher than home loan rates, at about 8%.
Finally, student loan debt is also an acceptable debt to carry. Interest rates on student loans can be as low as 4%. Not only that, but you won’t even get billed until you are done with school.
Still though, it’s not wise to rack up tons of student loan debt. One way you can reduce what you owe is to be wise about how you spend money in college. You could save some good money on your textbooks by renting them rather than purchasing brand new ones. It’s not like you’re going to need them after the class is over anyway.