Are student loans good or bad? Are they a great benefit or do they just add up to a bad investment? In fact, they can be both. And good student loan that can get you a good college degree to help you move up the career ladder, and a bad student loan that can actually leave you ill-equipped to repay crippling your finances for years to come. So today I'm going to talk about the pros and cons of student loans and other debt. I believe this helps you a great deal in taking a decision whether you should go for an education loan or not. So please bring in your pen and paper and note down all the points. Until then, I shall wait for you. Hello all, I'm Kapil Gupta, founder of Study Abroad Academy. And I'm on a mission to coach and mentor 100,000 high school students and help them realize their dream of studying in the best universities of the world and build happy careers for themselves. And today I'm going to share a difference between good student debt or a bad student debt. And this will help you that one should go for a student loan or not. And I believe all of you are ready to note down these points. So let's get started. Now let's see what is good debt exactly. Now it's about borrowing money for something that will appreciate or increase in value and make your loan worth the investment in time and money. So for example, mortgages. Now mortgage loans can be considered a good type of debt. For example, in our country, people like to invest in reality in properties, assuming that when they'll sell that property after a couple of years, that will they'll be able to make enough profit to offset some of the principal interest you paid on loan. Just unlike the car, for example, whenever we buy a car, as soon as you buy it, it loses its value. So a car will not be a good investment. Similarly, small business loans. Now, entrepreneurs obviously apply for such loans so that they can you know invest money in their businesses and then they are able to make a rise. This they can scale up the business. So such investments are actually good investments. But then what is a bad debt? It's like borrowing money to pay for something that diminishes or decreases in value over time. So just like I said about cars, that is, auto loans, that as soon as you buy a car, it actually depreciates in value. It's a depreciating asset. Similarly, credit cards, people use them a lot, but this is a very, very bad way of you know using your money because the interest rates on credit cards are just too high. So, what about student loans? Are they good or bad? Now, in this debate between good debt and bad debt, I would say student loans fall into a gray area. Now they can be considered good debt because the money you are borrowing to go to college is your ticket to earning a degree and getting higher in a high-paying job, and this debt must be paid off over time with a profitable career. Now, in fact, having a college degree significantly increases your earning potential compared to your peers with less education, and on the other hand, student loans can be bad because such a degree doesn't guarantee employment. Now, while unemployment for college graduates has been historically low, so it hasn't always stayed that way. The Great Recession in 2008 and then the coronavirus pandemic, it has actually worsened the job market for graduates and, of course, recent graduates, and even alumni who find jobs more easily than their peers may actually earn the kind of money salary that makes it easier to pay off the student debt. But then is student loan debt good? So I would say the student loans allow you to get a college education without paying full tuition. Now, with a college degree, you increase your chances of finding a stable, well-paying job. Some student loans are subsidized. So if you qualify, your interest will be paid over the selected time periods. Then student loan interest rates are usually lower than most other loan products, and the interest is also tax deductible. Student loans come with a variety of you know repayment plans and one can check from different banks. So it can make it easier for you to align loan payments with your budget. But then can that be bad also? That is the student loan. That's the main topic of our discussion today. So even if a college education improves your career chances, you may still find yourself unemployed after education and after, in fact, after graduation. So student loans can be a burden in the beginning of the career. So entry-level workers fresh out of college may also not earn enough to comfortably afford their loan payments. And also, the high value of debt compared to a lower salary can prove to be a problem. So unaffordable student loan debt can lead to default and which can actually ruin your credit score and prevent you from being approved for other types of credit in future. So to conclude, I can say student loans are a big decision that you'll have to grapple with for many years after college. So before signing up for a large student loan balance, do some research on your degree's income potential. It may be easier to justify a larger student loan balance for in-demand higher paying fields. But if you may prefer to spend less for a degree with lower earning potential, try to estimate your monthly payments and how they may impact your future budget. Before pursuing student loans, it would be a good idea to look for free money for college by taking advantage of grants and scholarships. Because such scholarships are provided by both central and state governments, private corporate players, good amount of scholarships are also provided by universities themselves. And let's say talking about Europe, most countries provide like a free tuition fee, so only the living expenses are to be taken care of. So that would be a good idea. So you can contact our study abroad experts also to help you give good insights on it. So I hope you find this podcast useful. And if yes, please subscribe to this podcast on Apple, Spotify, and Google Podcasts to get notified. All my podcasts are around 10 to 15 minutes, so they are short and crystal. Please share a five-star review. And if you're part of my community, please share your learnings below. If you wish to reach out to me, I'm Kapil Gupta, your study abroad expert, and join my career advisor hub on Facebook and Instagram channel ReadySet. Until the next episode, cheers or less keep inspiring.