Is being in debt with student loans really that bad?

[ParkerBC,MSN,RN, PhD, RN]

I have read a lot of different posts on the website about student loan debt and thought to share my plan with everyone simply as "food for thought". Having a significant amount of debt can leave a person feeling overwhelmed. However, there are two different types of debt that are considered "good" debt by both creditors and the federal government; student loans and a mortgage. When a creditor pulls your credit report and sees student loans and a mortgage showing, it shows you're a stable person (told to me by my bank manager when applying for my home loan). Student loans indicate you have furthered your education, thus making you a more marketable person in the workforce (perhaps not today because of the economy). What makes you even more marketable is what you majored in during your course of studies; nursing.

The federal government allows those with mortgages to write off property taxes, improvements, interest payments for the year, and if you recently purchased your home, points you paid at close. You can also write off the interest you paid during the year on your student loans. So, what does this all mean? First, I have to say that I have A LOT of student loan debt (an undergraduate and graduate degree and now pursuing nursing). I also own my home. After calculating the write offs I am entitled to for the year, I can claim 6 dependants on my federal taxes (by the way I am single with no dependants and yes you can do this...you won't go to jail). By doing this, I am able to bring in a little over $600.00/month more of my income (based upon 52K/yr) because less is taken out in federal taxes. Now, when it comes time to file taxes, I will claim 1 exemption and single. The write offs I mentioned above will "wash" my tax liability for the year because I will have paid in enough Federal taxes based upon my Adjusted Income. Don't forget that although I am claiming 6 dependants, there is still money being deposited for federal taxes just not as much if I were claiming 0. So, I have $600.00/month to pay my student loan debt.

I asked for help from a tax accountant to get all of this figured out to make sure I was on the right track. Don't take my example as legal advice. I am simply communicating what my plan is once I begin working as an RN with a significant amount of student loan debt and a mortgage. I would suggest speaking with a tax professional about your position and I am sure you will be surprised with the outcomeJ

Good luck!