I’ve heard many people lament over how much they owe in student loan debt but very few have considered it an “investment,” as they should. According to a Salary.com, the difference between a B.S. and a high school graduate (or GED) is $17,000 a year (from a 2003 article, but the differences are probably the same order of magnitude). If you have $100,000 in debt, that means that you’re getting a 17% ROI on your college education, I’ll take that any day.

Also, remember that student loan interest is tax deductible (depending on how much you earn, it starts phasing out after $50k AGI) and the interest rates are probably relatively low, so you’re getting a pretty sweet deal if you think about it!

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One of the side benefits of taking employer-reimbursed graduate courses (other than a free education) is that my $24k or so in student loans are deferred until I complete school, even when the net cost of the courses will be negligible. I didn’t even need to do anything to get them put into deferment; ACS found out by themselves and actually caught me off guard. They put the loans in deferment until my scheduled graduation date in 2012 (hopefully it won’t take me seven years but that’s the limit at Johns Hopkins).

While in deferment, the government will cover the interest payments but I can continue to pay off the principal without penalty and without surrendering the deferment status. It’s a double bonus – not only do I get a “free” education but I also get to avoid interest on the loans. You don’t need another reason to go back to school!

As many had predicted, Federal Stafford and PLUS loan rates will increase in July. I wrote about how graduates should consolidate ASAP instead of waiting, since the process typically takes two months to complete; but back then the actual rate hike was a mystery. Luckily, with most lenders your rate is locked whenever they being the processing. Smart Money predicted that the rate would be around 5.14% which is not far off from the actual rate come July 1st: 5.3% (an increase of 1.93%). The Federal PLUS loans are going to jump 1.93% to settle in at 6.1%.

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JLP posted an article at AllThingsFinancial after reading a SmartMoney article about how student loans rates are probably going up. The SmartMoney article details how student loan rates (Stafford) are probably going to go up by 1% – 2% when they get reset on July 1. Read on for an explanation but the bottom line is if you haven’t consolidated yet, consolidate it before July 1st or you’ll regret it.

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