Wealth and Debt: School Loans

Would you believe it if you were told that having debt could increase your wealth? 

If you finance your college education, technical school, or any other type of education you may owe money (have debt) but through that debt you now have higher earning potential which in the long run can increase your wealth. As you have learned, if you earn a college degree you will likely make over $1 million more than if you had just graduated high school. So owing $25,000 for college will still keep you ahead of the game. How much someone should borrow depends on the type of degree they plan to obtain and on the future earning potential for that degree/field of study.

Think About It

Consider the following scenario...

Nine months ago Daniel graduated from a public, state college where he earned a bachelor's degree in History. Daniel has $35,000 worth of student loans. He has been looking for a career-term position in his field since graduation, but so far he has not been able to secure anything. Daniel currently works at a department store earning minimum wage. Based on what you know about student loans as debt and Daniel's chosen career field and its future growth, do you feel Daniel's student loans classify as good debt or bad debt?

Choosing the correct things to go into debt for can increase your overall wealth.