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Let's stop saying college loans are always a bad thing

Katherine Liola, Founder and CEO of Concentric Private Wealth
Key Points
  • 44 million people in the U.S have student loans
  • School loans can be a great tool for a young adult to learn about financing, debt limits, terms of a contract, banking and working with a financial professional and institution.
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Student loans provide opportunity

It's clear we have a massive student loan debt problem in our country, but the news isn't all bad.

Student loans can be an equalizer. They provide opportunity.

I was among the 44 million people in the U.S who have student loans, until I paid them off last year.

It took me just shy of 18 years and was hard, overwhelming at times, and too often messed with my self-identity. Having school loans, however, also made be financially aware, focused (with my classes and job search) and built my self-confidence.

I would love to see a world where there is access to a free university education for everyone, whether it is through state schools, community college or an online degree.

skynesher | E+ | Getty Images

Until we live in a world, however, where college education is free, we are doing a major disservice to every student who can't afford college by saying that school loans are bad. Here's why:

  • School loans can be a great tool for a young adult to learn about financing, debt limits, terms of a contract, banking and working with a financial professional and institution.
  • School loans introduce the reality of the cost of education and hopefully stress the importance of taking full advantage of the opportunity.
  • School loans can help prevent a mindset that college is a big party.
  • School loans will often encourage or even require a student to work, which can help keep their time focused and managed.
  • School loans can motivate a student, upon graduation, to take a more serious look at their career path and overall future at an earlier date than other students, partly because there is a financial obligation that needs to be paid back.
  • School loans can be a great tool for parents to have a structured conversation about money, debt, goals, needs and savings.
  • School loans are a fantastic way for young adults to begin their financial journey while taking ownership for part (or all if needed) of their college experience.

The conversation needs to change so that we can empower students and families who need to use school loans rather than making these students and families feel less than.

More from Invest in You:
How to decide if that high price of college is worth it
When it pays to have a credit card with an annual fee
Here's how more Americans can get retirement plans

The current tone of communication around student loans in this country wires individuals to look at student loans as an adversity, something to avoid and something that can wreak financial havoc. It is rare to hear the positive opportunities that they can create.

If we want to continue to help advance our communities, we must to reframe the approach to student loans so that more people can look at student loans as a tool for personal, professional and financial advancement.

Student loans are about investing in ourselves. Let's prepare individuals for how to make the most prudent investment decision for themselves with their school choice and financing by teaching personal finance beginning as early as kindergarten.

The compounding benefits could be limitless.

Katherine Liola is the founder and CEO of Concentric Private Wealth. She is also a certified financial planner and chartered retirement planning counselor, and holds numerous other credentials and degrees.

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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.