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Color me shocked if I’m the only person in the world to not feel tense at the thought of their paying student loans. While I still have a ways to go into paying them off ($22,500 remaining), I still get very emotional at the very thought of having them.

According to debt.org, student loan debt is considered to be “good debt”. Now, I am not going to argue that investing in yourself is a good/bad idea. But I want to talk more specifically the about why they are terrible for your mental health.

Good on Paper, Bad in Reality

I see these same questions asked almost all the time when it comes to making a major financial decision across the web

  • Should I pay down my student loans or put the money in a 401K?
  • My student loans are low interest, should I pay them down or focus on my retirement fund?
  • Should I consolidate my student loans or ____?
  • Focus on my mortgage or student loans?
  • Should I fast for 3 weeks to speed up my student loans (kidding!…ish)?

Logically, every time I see this question the answer should be along the lines of “whatever gives you the best return.

In the real world, why does it feel so wrong? The smart decision is to be financially sound, but why does it seem to be the default ‘good debt’ to pay down over other methods?

We were born, molded, and defined by it

Assuming you didn’t have a full ride scholarship and went to college, chances are the first time you had some sort of debt was around the age of 18. What’s crazy is that this debt would grow, semester by semester. In most cases, it would reach 5 figures and it wouldn’t be too uncommon to see 6-figure debt.

I was a slightly above average student with a 3.2 GPA, took 4 years of classes.  I eventually made a decision on my major in the final year. It seems crazy to me that an average person has any idea what they want to do with their life at age 18.

For me, I realized that I actually owed money once I graduated. It was more of a blindside and a harsh reality knowing that I’d have to spend $600/month for a loan until my late 30’s/early 40’s.

The Heart of the Matter

When you spend all of your adult life getting and paying off a debt, it ends up influencing logical financial decisions.

Unlike mortgages, 401Ks, and other investment, we are often able to see and get excited about the progress.

  • You can build equity in a mortgage and have something you physically own. So that debt feels good.
  • Car loans provide a useful function every time you drive it. So it likely isn’t going to keep you awake at night.
  • IRAs and other investments often grow and you are able to measure wealth over time.
  • But for student loans, it’s just a debt that we never got to see. And likely based on the decision that probably wasn’t entirely ours. And it’s paid for on the fact that we made a decision to take a career path you aren’t 100% sure of.

So is student loan debt good? Financially, it is.

Is student loan debt good for the soul? Not really. That’s why in most cases I would prefer paying off my student loans over anything else as long I feel better mentally at the end of the day.

But that’s just me. What do you guys think? Do you feel that your student loans are worthwhile? Or better yet, are they the bane of your existence?

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Student Loans Are Bad