Student Loan Money-Don’t Use It To Buy an Iguana
It’s back to school time again. Twenty million Americans attend college each year. Sixty percent of those students will borrow money to help cover expenses. As I’ve mentioned before, you need to decide if your college degree will be worth the money. If you are attending college for the sake of attending and have no clue what you want to do with your life, going into debt with student loan money is a bad idea.
If you know your college education is going to further your career or lifestyle, then there’s no shame in having student loans. However, students, you really need to think hard about how you are going to spend that student loan money. Spending student loan money for non-educational expenses will come back to haunt you someday.
It’s been a while since I’ve been in school, but the loan process worked like this. We had loan disbursement day where you went into a room with a school official who gave you a bill for your tuition and fees. That money got subtracted from your loan amount, and you were handed a check for the balance. This was supposed to pay for housing, books, and other expenses.
It’s the other expenses that you can control. Take a look at some of my horrible examples to learn ways not to spend your student loan money. By and large, I didn’t ever borrow as much money as I was offered. I tried to decline unsubsidized loans when I could, but I do admit to using student loan money for some stupid reasons.
- Gambling-When I went to optometry school, we were an hour away from Tunica, Mississippi, the seventh highest place for gambling revenue in the US. A bunch of students always made a Tunica trip right after student loan disbursement day. I think the most I ever lost was $100 at a time, but still, pretty dumb right?
- Buying a Pet-During my third year of optometry school, I paid almost $300 for a dog. We won’t even talk about the iguana I thought I needed for some strange reason. This was before I learned the beauty of adoption, but even if it was free, there are tons of pet expenses to consider before actually getting one.
- Retail Therapy– I can’t tell you how many times I went shopping after a stressful week or a big exam. I told myself deserved it, but I should have just gone for a walk.
- Gym Membership– In optometry school, I always paid for a membership to Gold’s Gym, not because of their collection of free weights and the meat market atmosphere, but because they were open late. There was a perfectly good free gym at school, but it closed earlier than I wanted to work out. I thought I wouldn’t have energy if I exercised in the morning. If I had adjusted my plans just a little, I could have saved a ton of money. Ironically, most of my workouts are before 7AM these days.
- Entertainment-I can’t tell you how many concerts, dinners out, or other events I attended. My philosophy was work hard, play hard. I wish it had been work hard, save more.
I could go on and on. I didn’t need any of these things, and when you pay for something with student loan money, remember you are adding up to 8% interest on public loans and more for private ones. You will be paying for your stuff long after it’s been used up and discarded.
But You Only Live Once…..
Now, I’m not saying you have to be a total miser, sitting at home, eating ramen, thinking of ways to steal toilet paper from the school restrooms. Having a social life and experiencing new things should be a part of college. I would challenge you, however, to find ways to fund non-necessary expenses without using student loan money.
But I Have to Study!
Yes, if you are a student, keeping up your GPA to graduate is your full time job and the most important thing you can do, but do you really spend all of your spare time studying? I thought not.
I could have always had a part time job while in college, even if it was a crappy one. I thought that because I had scholarships, I didn’t need one. Even if you don’t want a regular scheduled position, there are tons of ways to earn money in college.
- Seasonal retail jobs you could do over holiday break.
- Work study
- Be a lifeguard
- Make money online
- Clean offices-I had a friend who started bidding on commercial cleaning jobs for small offices. She ended up having to hire employees because she had too many jobs!
- Babysit-My sister works part time and hires a college student to watch her kids. The sitter arranges her classes around the days when my sister works.
You’re college material. Come up with something.
If you take time spent from one or two days a week when you normally go out with friends, watch TV, or do keg stands, how much extra time would that give you? Look at however you use your down time and find a way to earn some extra cash. I bet you won’t need to use student loan money for non-education expenses.
Better yet, you could take a page from Emily’s book and invest your extra money to pay off the loans you do have to take. I bet if you work harder for that money than just signing your name for a student loan check, you might be less likely to spend it on stupid stuff.
What crazy things did you spend student loan money on? Looking back, would you do anything different with student loan money? Ever had a pet reptile?
It’s often alarming what young people will do with money…even if it’s borrowed! Kind of puts in perspective how potentially dangerous it is for people to be taking on huge loans at a young age without financial experience.
I’ve heard of people looking at student loans as interest-free loans. I’ve also heard of someone taking tuition money from parents and tricking them into believing he was taking classes. Meanwhile, he just lived in the college town and hung out all the time with his girlfriend. Crazy stuff!
I knew a few people that would get student loan checks. However, I never received any check. I only took out loans for part of my tuition (thanks mom and dad for housing) so no check was ever cut. I didn’t even understand that student could use student loan money for such things. I worked a good part of college part time. Sometimes I regret the time I put into it. But most of my jobs were easy and allowed me to do my school work while on the job. My roommates who didn’t work just watched a few more Law and Order marathons all day than I did. 🙂
I didn’t take loans in undergrad, so I’m not sure how that worked, but for a professional school, they really allow for you to borrow all your living expenses, regardless of parental income. I guess they think you aren’t able to work, which is true for some parts, but not the entire program.
The one and only additional expense I incurred in college was joining a fraternity. Was it crazy? Absolutely not. I developed long and lasting friendships.
I’ve heard many people say that same thing. I was never in a sorority, so I can’t comment on that.