America’s college students are not squandering their student loan money on spring break

It’s March, which means constant coverage of college basketball and coeds whiling away their days in bars and bikinis. But over the past few years angst about spring break has taken on a new flavor: finger-wagging about a supposed rash of students wasting their student loan dollars on a beach vacation.

The spate of stories on the topic originate from a survey by LendEdu, a consumer finance comparison site, which found that about 30% of students with debt plan to use their loans on spring break. This year, 57% of college students who receive student loans plan to use some of those funds to pay for their spring break trip, a according to a poll of 1,000 students conducted by the site and released this week. While those statistics are certainly headline-grabbing, they likely don’t accurately portray the circumstances (or intentions) of most student loan borrowers, experts say.

‘The students who are generally depending on financial aid are students who can’t generally afford to go on spring break.’

Mark Kantrowitz, the publisher of Cappex.com, a college scholarship and search site.

As many as one-quarter of college students borrow more than $2,500 in excess of their net college costs, or tuition and fees minus grants and aid, according to an analysis of government data by Mark Kantrowitz, the publisher of Cappex.com, a college scholarship and search site.

Though there’s no data on what the students spend that money on, it’s hard to imagine the vast majority of these students have much room to use it on a spring break trip, he said. The cost of living in college far exceeds that extra $2,500; room and board for an in-state student at a public four-year school, was $10,440 during the 2016-2017 academic year, according to the College Board.

“These kinds of stories you hear of students spending student aid money on getting drunk and going on spring break are often used to criticize and say, ‘Maybe there’s too much student aid money,’ and that’s really not the case,” Kantrowitz said. “The students who are generally depending on financial aid are students who can’t generally afford to go on spring break.”

The survey targets a very specific subset of students, who are more likely than others to say they’re using their student loan dollars on a beach vacation: those who have debt and who are also planning on going on spring break. It doesn’t ask the question of student loan borrowers who aren’t planning on going on a trip — likely the vast majority of them.

Mike Brown, a research analyst at LendEdu, said in an interview that he wasn’t too surprised by the results. Though getting an education is the most important aspect of college “as a college student, you do want to have fun sometimes,” he said.

Mike Brown, a research analyst at LendEdu, said in an interview that he wasn’t too surprised by the results. Though getting an education is the most important aspect of college “as a college student, you do want to have fun sometimes,” he said.

But what we know about today’s college students doesn’t support the notion that such a large share of students would be using their loan money for spring break would be using their loan money for spring break, said Mark Huelsman, a senior policy analyst at Demos, a left-leaning think tank.

Most college students can’t afford to squander their loan money

Though the image that “college student” conjures up in our mind is likely of a coed at a relatively well-known university enjoying football games and keggers, the reality is that most college students don’t fit that definition. Today’s students are likely to attend community college or a less selective regional public college. They probably take on debt to do so and in many cases are working to make ends meet. In some cases, they can’t; nearly half of college students experience some kind of food insecurity, research shows.

The idea that students are spending loan money during spring break “is based on a totally outdated assumption of who American college students are,” Huelsman said. “The college student of yesteryear had more financial flexibility because they didn’t have to borrow to pay for college and they didn’t have to pay sky high expenses.”

Even if students were angling to use their student loan dollars for a big trip, it would probably be hard for them to find enough to do so, Huelsman notes. Typical undergraduate students can borrow a maximum of $31,000 over five years from the federal government. The average cost of attending a public school in-state for four years, including room and board, was $80,360 during the 2016-2017 academic year, the College Board found.

Theoretically, students could get access to more loan money by either having their parents borrow or taking on a private loan, but both would require the help of a parent (private student loans almost always require a cosigner). It’s possible that students with debt are still traveling while in college, but Huelsman cautions against making assumptions about how that trip is being financed.

“If a student is going on vacation while they’re in college, it doesn’t necessarily mean they’re using their loan dollars to do it, maybe they’re working,” he said.

Students do have control over how some of their loan money is spent. Borrowers who qualify for more financial aid than what is paid directly to the school get a so-called refund check, after the college has taken its share, to use on living expenses. Often students have trouble stretching that check out over the entire semester, Kantrowitz said, so it seems unlikely that a student would have hoarded enough financial aid dollars to use the check to cover spring break.

The confusing nature of the financial aid process means that sometimes students wind up borrowing more than they need. Students may not realize that they’re not required to take those extra loan dollars to use on living expenses. At Indiana University, financial aid officials began sending students letters a few years ago detailing their borrowing to date and their estimated debt for their entire college career to help students think more critically about how much they needed to borrow and whether they need to take the whole refund check.

Some students do understand what that money actually is, “and they’ll give it back,” Phillip Schuman, Indiana’s director of financial literacy said of the refund checks. “Some choose to spend it, and some put it in their bank accounts as an emergency fund.”

Often when students over-borrow, it’s due to confusion over things like interest rates or what constitutes free money and what is money they’ll have to pay back, not necessarily to fund a lavish lifestyle, Huelsman said. “That’s where the complexity really comes into play,” he said. “It doesn’t come into play with students taking out $40,000, not knowing what to do with the money and going on vacation with it,” he said.

This story was originally published in March 2017 and has been updated with new data from 2018.

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