How severe is student loan debt condition in our nation

Student Loan Debt

This week Patricia Sanders, a freelance financial writer offered to contribute a story about the student loan debt load problem.

How severe is student loan debt condition in our nation

Decades ago, college education cost was affordable for most of the students in our nation, but now the situation has changed. Presently, completing higher education is a matter of huge financial cost and next to impossible without taking out student loans.

As per recent data on student debt, almost 69% students, who completed graduation from public and non-profit colleges in 2014, have  student loan debt. The debt amount was an average of $28,950 per borrower. From 2004 – 2014 the percentage of graduates with debt remain 65%-69%, but the average debt burden at the time of graduation has increased significantly. read more

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Student Loans: The Good, The Bad, and The Ugly

student loans

Student Loans: The Good, The Bad, and The Ugly

Are student loans good for your financial health? They are certainly in the news a lot and often not in a good way. But loans are an important financial tool for financing a college education and can be all three: Good, Bad, and Ugly.

Good Debt and Bad Debt

First of all I want to explain my view of debt. There is good debt and there is bad debt.  Good debt is any debt which you take out to pay for an asset which has a good likelihood to appreciate in value. If you live in your home for 10 years or more, then it has a pretty good chance to appreciate in value so a mortgage is good debt. Bad debt is any debt you take out to pay for assets which depreciate in value or maybe have no value at all. Credit card debt used for clothing purchases is a perfect example of bad debt. What do you think used clothing is worth? As soon as you walk out of the store and put it on, its worth pretty much nothing. Many people borrow to pay for their cars and even though sometimes you have to get an auto loan because you don’t have $30,000 lying around, it is also bad debt. Cars depreciate incredibly fast when you leave the showroom and debt used to buy them is definitely bad debt. read more

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