Student Loan Debts

education loans
good debt
Co-Authored and Reviewed by Gagan Sandhu, MBA - The University of Chicago Booth School of Business, CEO of Xillion
Posted on . 1 min read

Student loan debt is getting out of hand, but that doesn't mean you should avoid it at all costs.

The White House recently released data illustrating the extent of our student loan problem:

"Nearly one-third of borrowers have debt but no degree, according to an analysis by the Department of Education of a recent cohort of undergraduates."

"Since 1980, the total cost of both four-year public and four-year private college has nearly tripled, even after accounting for inflation."

"The typical undergraduate student with loans now graduates with nearly $25,000 in debt."

So should you avoid student loans at all costs? Not necessarily. Tuition is sky-high, and that's an unfortunate fact of life in contemporary America. But education can still unlock considerable opportunities for you throughout your career. It's ultimately about weighing the costs and benefits of loans.

Also, consider the distinction between good and bad forms of debt. When utilized properly, debt can be a useful tool in building wealth. Low-interest rate debt is better than high-interest debt.

< 5% → Generally good

5% - 10% → Good if utilized well (to buy assets, higher education, etc)

> 10% → Generally bad

For any big financial decision, our mentors are here to help you through the journey.

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