Student Loan Debt

I'm often asked by my clients and friends if they should pay off their student loans. And that all depends...on what, you ask? On the following:
1)Student loans are considered "good debt" ( as is a mortgage) Why? Well bc it was ( hopefully assuming you didn't major in Alchohol for Dummies ) a good investment in yourself...helped you land that job, qualify for higher pay etc. etc.
2)One advantage of having the loan, is that the interest is deductible on your income tax return .

In 2008, to take the full deduction ( which is a max. deduction of $2,500 of interest paid), your modified adjusted gross income (MAGI) must be under $55,000 for single filers (same as in 2007) or under $115,000 for joint filers ($110,000 in 2007). A partial deduction is allowed for single filers with a MAGI between $55,000 and $70,000 (in both 2007 and 2008) and joint filers with a MAGI between $115,000 and $145,000 ($110,000 and $140,000 in 2007).

For calculations if you fall within the phase outs, email me at askmisspenny@gmail.com

2) Most of the time student loan interest rates are low ( under 6% ). You could be better off investing that money into the stock or real estate market which over time has the potential to give you more than that. ( on average the market has returned around 12% over the past 30 years)

If you don't get the deduction, your interest rate is not that low, then you're betting off just paying it off as soon as possible. If not, keep paying the required payments, if you can manage to make that $20o student loan payment, force yourself to put $200 into savings too!!