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Thread: Student loans diverted to clothing, phone, survey finds

  1. #1

    Student loans diverted to clothing, phone, survey finds

    http://www.cnbc.com/2016/10/17/stude...vey-finds.html

    Most people know what it's like to be broke in college. When they might not know is that increasingly, students are using aid dollars to cover their lifestyles as well.

    As student loan debt reaches a record $1.3 trillion, more students report using some of that money to pay for expenses not directly related to education, according to a survey by Student Loan Hero.

    Two in 5 said they would use at least a portion to help pay monthly bills, including car payments and insurance; 15 percent percent said they used their student loans to buy clothing and 13 percent said they eat out on that borrowed money.

    Additionally, current students were twice as likely to spend their loan cash on non-educational expenses as 2016 grads, according to the survey of over 1,000 of soon-to-be graduates conducted in September.

    Without much oversight on how that money is dispersed once tuition is paid, "it's pretty easy to use your excess funds this way," said Jeffrey Trull, Student Loan Hero's content director.

    As a freshman at Henderson State University in Arkansas, Cordell Reynolds, now 30, covered his tuition expenses with a partial academic and athletic scholarship but took out a student loan so he could purchase new clothes and go out with friends.

    "I was very cautious about it initially — I didn't want to run into any debt issues — but I realized I didn't have the money and my parents didn't have the money to help me out," Reynolds said. His teammates were covering costs the same way and he followed their lead, he said.

    By the time Reynolds finished college and graduate school, his loans totaled $104,000. He now works as a college planner and is on an income-based repayment plan. He cautions current students from racking up that kind of debt on "unnecessary expenses."

    "The biggest piece of advice I give students is to prepare financially for college ahead of time."

    Still, for Ronnika Williams, now 32, it was worthwhile. As a graduate student studying library science at North Carolina Central University, Williams' student loans allowed her to cover her travel expenses for weekend trips home to Benton Harbor, Michigan, as well as socializing with her classmates.

    By graduation, Williams, who is now a digital archivist, was $55,000 in debt. "Maybe a few of those outings weren't worth it," she said, but "that was the lifestyle I chose."

    Even though borrowed money is readily available, financial experts caution against raking up too many loans in college.

    "While sometimes it's unavoidable for students to use student loan money on necessities like housing, students need to be careful," said Shelly-Ann Eweka, a financial advisor with the financial services firm TIAA.

    "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," she said.

    In fact, that college debt burden has far-reaching consequences. As a result of their financial obligations, nearly half of millennials said it prompted them to delay buying a house, according to a TD Ameritrade survey released last year of 1,000 adults age 18 and older. About 29 percent said they were putting off getting married and 38 percent said they postponed having children.

    "If you can reduce the amount of loans for incidentals, it can make a huge difference in your overall debt when you graduate," Mary Johnson, vice president of financial literacy and student aid policy at Higher One, said in an earlier interview.

    Rather than take out every single dollar that's available, shoot for as little as possible, said Bakari Miller, a workplace banking coordinator at Regions Bank. "That will lessen the financial stress down the road."

    Miller suggests starting with a financial plan at the outset to set the expectation of what school expenses will be like. "College can be one of the best times in your life – you don't have to deprive yourself but you do need to brace yourself."

    Then, get familiar with the terms of any type of borrowed money, including the interest rate, length of the loan and what happens when you miss a payment.

    "If they're going to borrow money for nonessential purchases, at least know the ramifications and consequences," he said. "When students understand that, they make better decisions."

    Also, underclassmen should take into consideration their future career and earning potential and factor that into their decision about how much they want to borrow, said Jimmy Lee, CEO of the Las Vegas-based Wealth Consulting Group. "That might get them to think twice about using that money for things that are not necessary."
    And TIAA's Eweka advises students who find they are struggling to get by to look into work-study opportunities, which are often included as part of financial aid packages. "Having a part-time job can be a tremendous help when it comes to paying for living expenses," she said.



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  3. #2
    What is wrong with these dipsh!ts , why would they not have a part time job ?
    Do something Danke

  4. #3
    But but but, its Naught a Bubble! At all!
    1776 > 1984

    The FAILURE of the United States Government to operate and maintain an
    Honest Money System , which frees the ordinary man from the clutches of the money manipulators, is the single largest contributing factor to the World's current Economic Crisis.

    The Elimination of Privacy is the Architecture of Genocide

    Belief, Money, and Violence are the three ways all people are controlled

    Quote Originally Posted by Zippyjuan View Post
    Our central bank is not privately owned.

  5. #4
    Some learn the hard way how to manage or not manage their money. But banks have been making it easier for college students to borrow money (not just student loans but credit cards as well). That means they learn the "hard way" a bit later when payment come due.

  6. #5
    Personally. I think that Student Debt is getting out of control. I don't think people should have to go into debt for years after they graduate just to pay back what they got in their education.

    But at the same time, I believe fully in learning to budget yourself. You should not be using your money to eat out, party, and have fun. That money is to help with an education.

    So sad. It's going to make things worse for these people if they don't learn to budget correctly.

  7. #6
    I have seen enough that I am firmly against student loans. Full stop. The rate of repayment is low, graduates are not getting jobs paying well enough to repay the loans, and the who college party atmosphere says a good portion of students really do not have much concern about learning anything. They should go home and work until they figure out what they really want to be when they grow up.
    #NashvilleStrong

    “I’m a doctor. That’s a baby.”~~~Dr. Manny Sethi

  8. #7
    Quote Originally Posted by Suitandtie View Post
    Personally. I think that Student Debt is getting out of control. I don't think people should have to go into debt for years after they graduate just to pay back what they got in their education.

    But at the same time, I believe fully in learning to budget yourself. You should not be using your money to eat out, party, and have fun. That money is to help with an education.

    So sad. It's going to make things worse for these people if they don't learn to budget correctly.
    Never let Education get in the way of Learning - Mark Twain
    1776 > 1984

    The FAILURE of the United States Government to operate and maintain an
    Honest Money System , which frees the ordinary man from the clutches of the money manipulators, is the single largest contributing factor to the World's current Economic Crisis.

    The Elimination of Privacy is the Architecture of Genocide

    Belief, Money, and Violence are the three ways all people are controlled

    Quote Originally Posted by Zippyjuan View Post
    Our central bank is not privately owned.

  9. #8
    Quote Originally Posted by euphemia View Post
    I have seen enough that I am firmly against student loans. Full stop. The rate of repayment is low, graduates are not getting jobs paying well enough to repay the loans, and the who college party atmosphere says a good portion of students really do not have much concern about learning anything. They should go home and work until they figure out what they really want to be when they grow up.
    Work what? A minimum wage job? What's that gonna do in this day and age? Plus hanging around like minded people has its own benefits.



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  11. #9
    Quote Originally Posted by timosman View Post
    Work what? A minimum wage job? What's that gonna do in this day and age? Plus hanging around like minded people has its own benefits.
    @tod evans said something about anyone being worth their salt should strive to be self employed, I tend to agree. no diploma needed for that either.

    'We endorse the idea of voluntarism; self-responsibility: Family, friends, and churches to solve problems, rather than saying that some monolithic government is going to make you take care of yourself and be a better person. It's a preposterous notion: It never worked, it never will. The government can't make you a better person; it can't make you follow good habits.' - Ron Paul 1988

    Awareness is the Root of Liberation Revolution is Action upon Revelation

    'Resistance and Disobedience in Economic Activity is the Most Moral Human Action Possible' - SEK3

    Flectere si nequeo superos, Acheronta movebo.

    ...the familiar ritual of institutional self-absolution...
    ...for protecting them, by mock trial, from punishment...


  12. #10
    Quote Originally Posted by presence View Post
    @tod evans said something about anyone being worth their salt should strive to be self employed, I tend to agree. no diploma needed for that either.
    Forget it, you get cut off from the government contracts so no access to the money printing machine. You are going to break your back. It is better to subvert the system from within.

  13. #11
    Quote Originally Posted by timosman View Post
    Work what? A minimum wage job? What's that gonna do in this day and age? Plus hanging around like minded people has its own benefits.
    Absolutely. Then they can understand what it feels like to work hard to pay for little twits like themselves to go to college to learn nothing and do nothing.
    #NashvilleStrong

    “I’m a doctor. That’s a baby.”~~~Dr. Manny Sethi

  14. #12
    100% confirmed.

    Our millennial nephew wants more of this (luxury) , and at the same time he also is extremely doubtful he'll ever be able to pay this student loan back. Sat across from me at our kitchen table and told me so. Also mentioned his parents early 2000's home-improvement loan as a sort of "They got THEIR loan, now I deserve mine!"
    I was speechless.

    Learned this when we opened up our house to him and let him "take a break" from his college studies. I had no idea he had changed so drastically.
    Had to have his expensive health food, couldn't save some $ and share the inferior food we offered to him. (we stocked for his tastes, his tastes had become more picky)
    Had his "beauty routine", consisting of health store (expensive) oils and lotions.
    Had his fashionable, expensive, clothing, latest iphone, Apple super laptop, etc.

    I had no idea the disconnect could be so strong. He wasn't this stupid the first time he stayed with us. (first visit was after high-school graduation a couple years ago)

    College has not served him well. Dumb as a rock as far as current events. Attending the U of MN and had no clue about the MN protests back in August.

    His co-signer parents totally messed this up.
    He has two more years of luxury lessons to go. Into it for $150,000.00 + so far. This is for interior design. And as far as I could tell, he hadn't learned anything that the internet couldn't teach him. What a waste.

    Easily triggered, too. I "went there" and was shocked. Reactions were exactly the poor reactions we read about/see.

    A lot of talk about "what people presume about me". Acts gay but he's not gay, and it's his "right" to have a third party silence any comments that suggest he's a fancy lad and wasteful.

    EDIT to attempt to clarify my info-rant : It's this hiding in a group thing that wears on me, an "eccentric" individual, is how I prefer to see everyone.

    We're not giving up on him, but man, oh man. A nation of these things will absolutely group together to have a third party kill for their luxury, and then maybe think about it later.

    Easy money is danger #1.

    Last edited by bunklocoempire; 11-04-2016 at 03:23 PM. Reason: type too much-blow it lol & clarification
    Fear of man will prove to be a snare, but whoever trusts in the LORD is kept safe. Proverbs 29:25
    "I think the propaganda machine is the biggest problem that we face today in trying to get the truth out to people."
    Ron Paul

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  15. #13
    i still think the student loans interest rate should be what the big banks pay .

  16. #14
    Big surprise. An 18 year is given a bunch of money and spends it like an 18 year old and gets a worthless degree and can't pay the poor bankers back. We can't let the bankers get ripped off. They didn't know any better than to loan to an 18 year old, with no collateral and getting a degree in basket weaving and a minor in transwomen's studies. Let's bail the bankers out
    ...

  17. #15
    Keep all this in mind when stupid commies talk about debt forgiveness for these kids .
    Do something Danke

  18. #16
    Instead of doing Student Loans, why dont they just give all the damn college kids an Unlimited Credit Card and tell them go nuts and buy what ever you want to buy with the money intended for your education (not learning, remember education != learning) such as things like HDTVs, Hookers, Alcohol, Cars, Vacations to Hawaii and the Gulf of New Mexico by Arizona Bay and everything a college student needs to look cool without ever paying for an overpriced book or a class!

    That'll fixez teh Economiez foshoyo!

    /total $#@!ing sarcasm
    1776 > 1984

    The FAILURE of the United States Government to operate and maintain an
    Honest Money System , which frees the ordinary man from the clutches of the money manipulators, is the single largest contributing factor to the World's current Economic Crisis.

    The Elimination of Privacy is the Architecture of Genocide

    Belief, Money, and Violence are the three ways all people are controlled

    Quote Originally Posted by Zippyjuan View Post
    Our central bank is not privately owned.



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  20. #17
    Wut? How is this even possible? When I took student loans, the funds were dispersed directly to the school-I didn't get any of it. I didn't even get cash for textbooks, lab fees, etc. :P
    Quote Originally Posted by Torchbearer
    what works can never be discussed online. there is only one language the government understands, and until the people start speaking it by the magazine full... things will remain the same.
    Hear/buy my music here "government is the enemy of liberty"-RP Support me on Patreon here Ephesians 6:12

  21. #18
    Quote Originally Posted by heavenlyboy34 View Post
    Wut? How is this even possible? When I took student loans, the funds were dispersed directly to the school-I didn't get any of it. I didn't even get cash for textbooks, lab fees, etc. :P
    We're not so desperately apart in age, but I will add that scholarships work like in the OP, too. I was paid to go to college and there were no restrictions on what I could buy; it just went into my bank account after the tuition and lab fees were paid. I will say that I had to keep up a certain average in order to keep the scholarship, versus no strings of the sort on the loans. By the time I got bored with college and fled, I'd gotten a couple of semesters' worth of overage saved up to prove to the world I knew better (and crash and fall on my butt several times, which is the best teacher there is).
    Genuine, willful, aggressive ignorance is the one sure way to tick me off. I wish I could say you were trolling. I know better, and it's just sad.

  22. #19
    Quote Originally Posted by MelissaWV View Post
    We're not so desperately apart in age, but I will add that scholarships work like in the OP, too. I was paid to go to college and there were no restrictions on what I could buy; it just went into my bank account after the tuition and lab fees were paid. I will say that I had to keep up a certain average in order to keep the scholarship, versus no strings of the sort on the loans. By the time I got bored with college and fled, I'd gotten a couple of semesters' worth of overage saved up to prove to the world I knew better (and crash and fall on my butt several times, which is the best teacher there is).
    *thumbsup* That's how my (minor) scholarships worked too. ~hugs~
    Quote Originally Posted by Torchbearer
    what works can never be discussed online. there is only one language the government understands, and until the people start speaking it by the magazine full... things will remain the same.
    Hear/buy my music here "government is the enemy of liberty"-RP Support me on Patreon here Ephesians 6:12

  23. #20
    Quote Originally Posted by heavenlyboy34 View Post
    Wut? How is this even possible? When I took student loans, the funds were dispersed directly to the school-I didn't get any of it. I didn't even get cash for textbooks, lab fees, etc. :P
    They probably didn't trust you and knew where you would go at night to blow your money.
    Pfizer Macht Frei!

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  24. #21
    I posted a thread about this in 2012!

    http://www.ronpaulforums.com/showthr...t=observations

    Can't imagine how bad it is now. And to follow up that old thread, the younger people that my observations were based on are still working menial jobs unrelated to the schooling they took the debt on for in the first place.
    "Let it not be said that we did nothing."-Ron Paul

    "We have set them on the hobby-horse of an idea about the absorption of individuality by the symbolic unit of COLLECTIVISM. They have never yet and they never will have the sense to reflect that this hobby-horse is a manifest violation of the most important law of nature, which has established from the very creation of the world one unit unlike another and precisely for the purpose of instituting individuality."- A Quote From Some Old Book

  25. #22
    Quote Originally Posted by oyarde View Post
    What is wrong with these dipsh!ts , why would they not have a part time job ?
    I bet not a single one of them became an undocumented pharmacist.
    “[T]he enshrinement of constitutional rights necessarily takes certain policy choices off the table.” (Heller, 554 U.S., at ___, 128 S.Ct., at 2822.)

    How long before "going liberal" replaces "going postal"?



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