The biggest mistake low-income students make when it comes to student loan debt

The biggest mistake low-income students make when it comes to student loan debt, in my opinion, isn't what you might think. 

Sure, taking out too many loans for a private school may not always be the best decision if you can get a similar degree at a public institution for much cheaper (though some private schools may surprise you with how much financial aid they'll offer if you're a great student).

And getting too many loans and dropping out of college before getting the degree that can help open up opportunities which would help you pay back those loans is definitely not good. 

However, the biggest mistake I see students making, especially those who come from low-income backgrounds (like I did), is something different:

It's the misunderstanding of the difference between "debt" and "investment."

Rich people invest. Poor people go into debt. 

If you grew up in a low-income family like I did, in college you may find yourself feeling so burdened from having seen the debt your parents had to endure that you think the number one way to stop being poor is to not get into debt. 

But this can backfire.

To be sure - you shouldn't go racking up credit cards on the fanciest clothes, cars, homes, and things you can't afford. That is still classic debt. 

But your college education is one of the best investments you can make, as long as you are willing to invest the time necessary to do it well and get the degree.

I remember being really afraid of a $1,500 loan I was offered my second year of community college. Loans? Debt?! Yikes!! No no no. Debt is bad, bad, bad. I'm definitely not going to take this loan and instead I'll work more hours - yes!!

But here is what a wise mentor told me: 

Your education is the best investment you can make (especially at a reputable, accredited, public school). If that loan can help you work less, get involved more, and increase your performance in school then it is a WISE investment. 

I decided to take that loan. It allowed me to work a little less and get involved (and study) a little more.

I became president of our Phi Theta Kappa chapter that year and won the $110,000 Jack Kent Cooke scholarship.

See the difference? It was an investment, because it gave me the opportunity earn more money and be more successful in the long run. 

Let me say that again: An investment is something that can make you even more money in the future. 

Debt is something that sinks you deeper into a hole in which the thing that got you into debt CANNOT get you out.

The newest phone, the luxury car, the designer clothes - those things alone don't have power to get you out of debt.

But a college degree, well, even recent reports still show it is the kind of thing that can help you make more money. It's an investment. 

I've always believed that learning and developing your skills is the best investment you can make. Even in my own business I use my credit cards with abandon when it comes to buying important books or traveling to meet amazing people. Even when I'm not sure if those risks paid off in the moment, I come to find out they always do. 

And if you're still not convinced, let me tell you a very short story about an investment a friend of mine made during his college experience.

It goes like this:

My friend went to a college not located in Washington, DC. He was not rich.

He eventually realized he wanted to work in politics.

He learned that getting an internship in DC was a really good way to get involved in politics. To him it seemed only rich kids were getting internships in DC because their parents could afford to pay for them to live there.

He decided that wasn't going to stop him.

He took out a $6,000 loan in college to help fund a semester in DC for an internship in politics.

Today he works in The White House. Literally. For real. The actual White House. Where the President of the United States lives. The President is his boss. 

You get the picture. ;) 

Invest in yourself. Seek out mentors and talk to financial aid advisors before making any big decisions. 

(If you want to learn more, my favorite financial book for young people is The Money Book for the Young, Fabulous, and Broke by financial expert Suze Orman. In it you'll also find she agrees with me that college is one of the BEST investments you can make - yes, even if that means taking out some student loans.)

Like any investment, there is risk involved, but the good news about college is you have control over most of the risk, because you're investing in yourself! The best way to reduce risk is to dedicate your 110% to your college education. 

What does that look like? Well, to find out I also recommend investing in some college success books! Invest in your learning and give your best. You are worth it.