Time for restrictions on how students spend loan money?
In the ideal, student loans are supposed to pay for tuition, books, room and board — you know, the basics. But, since it's the first time that they've had that much cash available to them, some students get a little carried away.
It's easy to become complacent about student debt (now easily topping $20,000 per student, according to BMO research) because the bills don't show up until after a six-month grace period following graduation.
“So many students are told to take out more loans than they need for books and other things, but I saw student loans pay for more spring break trips, TVs and cars than I can count,” writes Stephanie M.
“I didn’t get one, but my roommate did, and she thought it was free money. So she bought a bunch of clothes — including gifts for me and the other girls living there. The school counselors do make it seem like free money though, saying you can buy whatever you want with it," adds Renata M.
Even though they're on the hook for the money borrowed, such profligacy has prompted more than one observer to suggest tightening the rules on what students can actually do with the money they receive.
Realizing that some teenagers just can't handle such a $$ bonanza, UK universities such as the University of East London, have been introducing measures to ensure that the money goes to good use.
While limited to bursaries at the moment, perhaps some students would be better off if government loans came with more built-in controls as well.
Did you stick to the plan when financing your education? Should students be limited in the way they use government loan money?
By Gordon Powers, MSN Money