Anything related to student loans I have my eyes and ears open for. I’m currently in the process of paying off some stupid tax (Dave Ramsey’s phrase) for loans I took out in my undergrad and graduate studies. Today I read an article entitled “Student-loan debt is a good investment; Commentary: A college education still gives a great return”. This is an article written on behalf of the Wall Street Journal, which you would think would have more common sense than that.
Reading the article I understood where the author was going, even though her title is…bad! Her point was that people and the media portray student loans in such a negative light, yet the numbers and debt amount isn’t as bad. She states having a college education increases your chances of having a higher salary throughout your career. While I agree with her on the probability of earning more money with a college degree, I COMPLETELY disagree with loans being a good investment. First off, why can’t you be a student without a loan?? Second, how much money you make, doesn’t necessarily speak on your net worth. As a matter of fact, many people with high salaries have a LOW net worth (assets minus liabilities). Having a student loan is considered a liability which in fact decreases your net worth. Come on Wall Street!!
Before I totally slashed the article into pieces, I wanted to get a good understanding of the definition of “a good investment” and make sure I was giving this author a fair chance. I first looked up the terms investing, gambling, and speculating (because I understand a lot of people use these words interchangeable sometimes). At best taking out student loans with the hopes of receiving a gain would be speculating, not investing. How many times do you see graduates come out of college with a heap of student loans with the hopes of landing that great job right out of school? How many of those same graduates find a job that barely supports the loan payments each month, and they continue to pay for years even decades?? There is no guarantee on your “investment” when you borrow money. You don’t know where you will be or how your world will turn out, you can only hope. That, my friends is called speculation (or even GAMBLING!).
If I dare, I would like to change the title of this Wall Street Journal article to read, “Getting an Education is a good investment: A College Education still gives a great return”. What do you think?