Americans currently owe a staggering $1.3 trillion in student debt, and the history of how college loans became such a monstrous problem for a whole generation of students is a shady, disturbing tale. What's worse is many students don't even know the difference between “good” debt and “bad” debt.
“Good” debt was mostly in the form of mortgages because you could build equity through home ownership. Better yet, you can deduct a portion of the interest if you itemize deductions on your federal taxes.
Then there’s bad debt such as credit card and installment loan finance charges, which can’t be deducted and can lead you into a financial black hole.
But the worst debt of all is probably college loans, particularly if they don’t lead to a degree or gainful employment.
How is college debt somehow worse than noxious credit card debt? For most people, it’s nondeductible. Even worse, except in extreme circumstances, you can’t get rid of it even in bankruptcy. It will stay with most people for decades if they don’t pay it off -- even into retirement.
Becoming a debt slave has become easier than ever in today's modern world and leaves a mark which young students will be forced to live with for the rest of their life. In the video created by College Humor posted below, they take a comedic look at why the world of college loans have become so twisted.