There is no shortage of debate over whether certain debts are good or bad or whether there is even such a thing as good debt. Million Dollar Journey says that good debts exist, and Big Cajun Man comes down on the all-debt-is-bad side. I think a large component of the disagreement is semantic.
Debt comes paired with something positive. Borrowing to go to school gives you an education and a debt. The education part is good and the debt part is bad. When people say that this is a good debt, they mean that you’re better off with both the education and the debt than you are with neither. But by itself the debt is still bad.
So am I just playing semantic games? I don’t think so. By getting the semantics right, we can change behaviour in a positive way. We should say that debt is bad, education is good, and that (most of the time) the advantage of education outweighs the disadvantage of having student loans. Phrased this way, it’s clear that minimizing the debt is desirable. We can still have the education with less of the associated bad debt by living frugally while going to school.
Instead of giving students a license to spend by declaring student loans to be good debt, we should call the debt what it is: a necessary evil for those who don’t have the savings to pay for school. Student loans are usually worth it in exchange for an education, but you can come out even further ahead by spending wisely while studying to minimize the size of student loans.
So, I say all debt is bad. It’s just that sometimes the thing we get in exchange for the debt is valuable enough that it makes sense to borrow.