Need more evidence the nation has a real problem with student loan debt? Close to a quarter of borrowers are blowing some of their student loans on alcohol; new research from LendEDU finds.
At a time when lawmakers across the country are clamoring for a surefire solution to the more than $1.4 trillion in student debt, student borrowers who ultimately suffer from the debt are throwing caution to the wind without a second thought. LendEDU found that 23.8 percent of student loan borrowers use federal funding for “some type of alcohol.” Meanwhile, countless student loan borrowers don’t know the interest rate on their loans or when they will come due. Shell-shocked graduates often struggle to pay back student debt which may now include drinks purchased at the bar according to the new research.
A lack of awareness and responsibility from student loan borrowers may be the reason that both Republican and Democratic lawmakers call for programs to improve financial literacy. According to the study, many students have no understanding of student loan basics such as the loan amount, interest rate, repayment plan, FAFSA deadline, and more.
To put an end to this, politicians have introduced a slew of legislation geared toward improving financial literacy. A bill introduced by Rep. Luke Messer, a Republican House member from Indiana District 6, would require colleges and universities to offer upfront annual statements that detail the total amount owed and projected monthly payments. Other efforts such as the Empowering Students Through Enhanced Financial Counseling Act and the Fairness in Student Lending Act call for improving financial literacy and transparency through counseling and clearer disclosures, respectively. The logic goes: if students enter the borrowing process with eyes wide-open, then they should make better decisions financially.
Alcohol in college doesn’t only hurt a student’s wallet, both today and down the road apparently. It can impact everything from their safety to their education. According to the National Institute on Alcohol Abuse and Alcoholism, roughly one in four college students claim that drinking made them miss classes, blow off homework, or otherwise negatively affect their grades. The National Institute on Alcohol Abuse and Alcoholism also found that 696,000 students between the ages of 18 to 24 reported being assaulted by another drunk student; additionally, alcohol-related sexual assault was reported by 97,000 college students between the ages of 18 to 24.
Author: Donna Fuscaldo
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