Personal finance advice typically divides debt into two categories, with "good debt" including college loans, loans for buying a home and business loans.
It's more complicated. The ability to turn a bachelor's degree into an income that outweighs the loans, and finance the purchase of a house with a mortgage you can afford and a value that increases beyond the sale price, are no guarantees in the U.S. today.. "Good" debt is defined as money owed for things that can help build wealth or increase income over time, such as student loans, mortgages or a business loan.
It's worth revisiting this topic and understanding the new rules of the debt game. While student loans and mortgages can be used successfully to build wealth or increase your income, that isn't always — or necessarily — the case. Using "good" debt successfully depends on a number of factors.Debt is a necessity for many lower- to middle-income Americans who wish to fund a college education, but as we've all come to understand, not all degree programs are created equal.
For example, if you're pursuing a master's in education and the average starting salary for someone from your school with that credential is $65,000, then you shouldn't take out more than $65,000 in loans to fund that degree.