For many college students, student loans are essential, but that doesn’t mean all of the money is going to tuition, room and board, and books. According to a new survey by LendEDU released yesterday, over 6 percent of student loan borrowers have used their student loan money to buy illegal drugs.
LendEDU surveyed a total of 500 student borrowers currently in college and asked them a series of questions related to how they use their student loan money.
While drugs and college are often synonymous for many young people finding their way into adulthood, with the nation staring at student loan debt of more than $1.4 trillion and countless borrowers struggling in repayment, using any student loan money to purchase drugs is hugely disappointing.
In the same survey, LendEDU also found that 5.6 percent of students said they have used student loan money for gambling and sports betting, while an alarming 23.8 percent of survey respondents said they have used student loan money to buy alcohol, whether from a store or in a bar.
A student from the University of Delaware, who wishes to remain anonymous, commented, “I’ve used portions of my student loan funding for purchases that have nothing to do with school. I try not to but sometimes if I need some extra cash I will take out small amounts from time to time. I’ve certainly used student loan money for questionable purchases in the past – like alcohol and marijuana – though I do regret it.”
Many student loan borrowers only consider the current moment when dealing with student loan money, not the long-term ramifications. Student debt doesn’t have to be repaid until six months after graduation, so it easy to spend the loans on non-school related purchases. These loans, however, have huge impacts on borrowers’ lifestyles after graduation, especially if they are stuck repaying excess debt used to pay for things like drugs and alcohol.
Studies have repeatedly shown that student loan debt is preventing people from purchasing homes, buying cars, getting married, starting families, and saving for retirement – all things that many college students are not concerned about.
The survey also highlights another problem that has a direct impact on how well borrowers fair in repayment. Many college students have little knowledge of financial aid, how it works, and how much borrowing money is going to cost them down the road.
Another recent survey by LendEDU focused on financial aid awareness found that of the 500 college students polled, 90 percent have heard of the Free Application For Federal Student Aid (FAFSA), but 84 percent had no idea when the deadline to file the application was. What’s more, 80 percent of college students with federal loans have no idea what their current interest rates are and 33 percent didn’t know the difference between a subsidized and unsubsidized loan. With those kinds of results, it’s not surprising that state governments have been proposing bills calling for more financial education for student loan borrowers.
Author: Dave Rathmanner
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