Student Loans Not Always 'Good' Debt

You may have heard about the concept of "good" debt versus "bad" debt – meaning that some debt generally is viewed as OK because it will give you a return on investment like a high-paying job later in life.

Millions of students must be parading the notion of "good" debt as the amount of money they are taking out for student loans has ballooned to amazing numbers. In fact, total student loan debt has now surpassed credit card debt in the United States. Last June, total student loan debt was estimated by FinAid.org to be $833 billion, while credit card debt was $826.5 billion.

What’s even more disturbing is the fact that more and more people are having trouble paying back these student loans. According to a recent report by the Institute for Higher Education Policy, less than 40 percent of borrowers are able to make timely payments on their student loans without postponing payments or becoming delinquent.

It's possible now that for some people, school debt has become more of a burden than a help when it comes to their future. In a recent column for the Washington Post, Michelle Singletary says that student loans aren't always wise debt to take on. This type of debt seems to not be delivering on its promise of paving a path to a good job with a high salary, she notes.

The median cumulative debt among graduating Bachelor's degree recipients at four-year undergraduate schools was nearly $20,000 in 2008. And the job market since then has been less than stellar, offering little opportunity for new graduates to move into a decent-paying job.