In a poll of college students who are planning to go on spring break this year and who currently have student loan debt, nearly a third (30.60%) of them stated that they’re using student loan money to help pay for their spring break trip, according to research from LendEDU.
“Considering the severity of the student loan crisis in the United States right now, this number is severely disappointing,” writes the LendEDU report. “In a previous study, LendEDU found that 49.80% of college students incorrectly believed the government would forgive their federal student loan balance. This means that a number of college students are using government money to pay for spring break and are fully expecting the government to forgive their lavish expenditures.”
How else are college students spending their loans?
Almost a quarter (23.80%) of respondents said they’ve used student loans to pay for drinking alcohol
33.40% said they’ve used student loans to buy clothes and accessories
33.40% said they’ve used student loans to pay for restaurants and take-out
6.60% said they’ve used student loans to pay for drugs
5.60% said they’ve used student loans to pay for gambling or sports betting
Leaving aside the obvious issues of students using loans to pay for drugs and gambling, is it a big problem that they’re using the loans to pay for other living expenses, including vacations? That depends.
Student Loan Hero conducted a similar survey on this topic last year and found that 20% of students reported using their student loans for non-education related expenses. “So we conducted another survey to dig a bit deeper and find out the kinds of non-educational expenses students are spending their student loan money on,” says Andrew Josuweit, CEO of Student Loan Hero. “It found that students were more likely to use the money to pay for cell phone bills and car payments than for vacations and alcohol.”
Consider that the LendEDU survey polled 500 students who were already going on a spring break vacation, so the chances of them using student loan money to help out is probably higher than the percentage of non-spring-breakers asked the same question. And consider also that of respondents with student loan debt who are going on spring break, 70% of them still said they weren’t using loan money to buy vacation margaritas.
“The facts are that financial aid is designated for educational expenses only,” says Heather Jarvis, an attorney and student loan expert. “Federal student loans include strict borrowing limits for undergraduates. Available financial aid, including loans, fail to cover the expenses of higher education for many families.”
In other words, many students are struggling to cover the costs of college even with student loans, so the idea that they’re throwing their loan dollars at trips to Cancun probably isn’t entirely accurate. Financial aid is meant to help with regular living expenses, but it only goes so far.
“Many students need student loans to help pay for daily living expenses like cell phones and food, but it is never a good idea to use student loan money to fund vacations,” Josuweit says. "Depending on the interest of their loans, these students could be paying hundreds of dollars in interest on top of what the vacation cost them.”
College Students Using Loans For Spring Break, Alcohol, Drugs
Reviewed by Mobile Tech World