MB 360–There is a massive student loan epidemic in the United States. Over $1.4 trillion in student debt is floating around in our economy lingering like an albatross on the necks of many young students. While the idea of getting a college degree is more popular today than ever, it would seem like going to spring break is also very popular. It is hard to track how students spend their student loans. Obviously most (if not all) goes to pay for college for the vast majority of students. But some use student loans to finance unnecessary items like partying it up on spring break and getting inebriated to celebrate a semester well done. A new LendEDU poll found that roughly one-third of college students used a part of their student loans to finance their spring break. While this is not the bulk of young college going Americans, the number is somewhat startling. Priorities folks!
Spending student debt for partying
There is absolutely value in going to college if done right. Yet using debt to act out a cliché spring break party scene for one week is just nuts. This is really bad planning and does very little aside from giving you a major hangover and hopefully only minor regrets after and a hefty bill once you graduate college.
Take a look at some details here:
“According to the LendEDU poll, 30.60% of college students with student debt claim that they are using money they received from student loans to help pay for their spring break trip this year. For reference, you can use student loan funding for living expenses.
The National Center for Education Statistics calculated that 20.5 million students will be attending college this year in the United States. Orbitz reported that 55% of students will be going on spring break. Using this data, we can roughly calculate that 11,275,000 students will be going on spring break this year. And, it is estimated that 69% of all current college students use student loan debt by the time of graduation. By doing some additional arithmetic, we can calculate that roughly 7,779,750 student debtors are going on spring break this year.
Factoring in our data, and assuming the claims made in our survey are accurate, this means that 2.38 million students are using money received from student loans to pay for their spring break excursion this year.”
This is simply crazy. Keep in mind that student loans are given out based on the cost of going to college but also associated living costs. So many students take on additional debt beyond tuition to finance things like well, spring break. That is not smart and you get an automatic “F” in financial planning if you do this. Or for example buying a $2,000 MacBook. 18 to 22 year olds simply do not realize how much this is going to cost them in the long run. And that is why the student debt mountain looks like this:
This is a runaway problem. And there are clear ways to remedy this. For example, putting a cap on where the money can be spent. Whatever funds are not used for tuition essentially become like a giant credit card for students that have no income coming in. And the grim reality is, at least based on recent figures, half of college graduates are working in jobs where degrees are not necessary. The wages that many are earning simply does not come to the level needed to pay off these giant levels of debt. And that is why the most delinquent loan class in America today is with student debt:
You can feel bad for students going to college trying to do the right thing and simply not realizing how bad paying back the debt was going to be. But those using student loans for spring break? It is hard to feel sympathy here.