We all know our country has a problem with student loan debt.
We’re up to a record breaking $1.3 trillion of debt.
But is that all going towards education?
We all have this image in our heads of broke college students struggling just to get by.
But is this really the case?
2 out of 5 students admitted to using at least some of their loans to help with their monthly bills.
These monthly bills include car payments and insurance.
I guess these could be considered necessities.
But, 15% of students said they used the money to buy clothes.
And 13% go out to eat with money taken from their student loans.
These are definitely not necessities, and could be seen as luxuries.
Which makes you wonder, are students spending their student loans wisely?
The problem only seems to be getting worse.
Current students were found to be twice as likely to use their student loan money on non educational expenses as compared to recent graduates.
It would appear that students are taking out loans in order to live the lifestyle they’ve chosen- not necessarily to cover their tuition costs.
So our image of the broke college student drowning in debt just to cover their education may be far from the truth.
In reality, students are taking out loans in order to go out with their friends and buy new clothes.
You might want to think about what that night out will really cost once you factor in the interest of the loan.
You may decide at that point that it’s not worth it when you realize how much you’ll really be spending.
Shelly-Ann Eweka, a financial adviser with TIAA said, “When it comes to buying clothing and food, it’s important for students to buy only what they need in order to avoid taking out more loans- both student and credit card- and therefore accruing insurmountable levels of debt.”
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