Why can’t I use student loans for vacations, including spring break? My friends have done it, and it is perfectly legal.
College Student
The students are naive about spending the money, claiming that the “student loans are free money” when they aren’t. Student loans are not the kind of money you receive for yours to keep, unlike grants and scholarships. You must pay back the money you receive with interest. Student loans are only a financial investment. Only money is approved for educational expenses, not personal. Qualified purchases include school supplies you need, tuition, textbooks, room and board, general living expenses, etc., that are related to school or semester-related activities. Unfortunately, many students are unaware of the restrictions on where the money comes from.
- This naïve leads to poor financial decisions.
- And they will be “penalized for fraud” or “misuse of funding.”
- And soon, you will have an inexorable amount of debt to your student loan bill when they graduate.
It is unfair for many students to use the funds other than the education-related and living expenses, and all affect those who took the financial aid responsibility. The fact hurt us for those who abuse the governmental funds. This spending behavior makes me feel bad about students who abuse the funds to use for “non-qualifying” expenses like “social trips” or “spring break.”
This blog is part of “Financial Fraud Prevention” that students need to educate the fund’s overall general purpose for the needy purchases. Student loans are not designed to spend anything.
The takeaway: Think before you borrow. There are financial award letters. Be sure you read them carefully. Calculate your total financial needs prudently. Finally, make your decisions to accept or reject funds you will need for school or semester related funds.
March 1, 2019, at Temple as the Specialist, discusses why it is wrong to use “student loans” for vacations, including spring break.
While at work, one student discussed how to use the available funds to use other than school-related expenses such as student loans. It was then a girl named Beecha*, a freshman, who had already discussed the plan for spring break. Another girl named Olivia* didn’t use much of the student loan’s fund for spring break because she claimed that spring break falls under “personal expenses” or “vacations.”
On February 15, 2019, Beecha* used the student loans for spring break. She was spending some money without thinking about what amount she paid.
“Ohh, I can use the student loans for spring break!”
“Yeah, that’s fine as long as we tend to spend it all together,” Nate* commented.
*The names were changed for privacy reasons.
My verdict to use student loans for vacations: Don’t!
Why?
A student loan is not free money as it must be repaid with interest. However, it can be used to cover various educational expenses such as tuition, books, and room and board. It’s important to carefully consider the dos and don’ts of utilizing student loans to ensure responsible and informed financial decisions.
Key:
- Dos means eligible spending (Qualified Spending).
- Don’ts mean ineligible spending (Unqualified Spending).
| Dos | Don’ts |
| College Tuition includes course fees | Personal Vacations – Spring Break, Travel, Vacations, Hotel/hostels, Airline tickets |
| School-needed supplies/items you definitely need | Investments |
| Textbooks and course materials | Savings |
| Room and Broad – housing costs | Entertainment costs |
| Other transportation costs to and from school (commute) | Personal items from shopping |
| Other living expenses (Dormary) | Down payments – Car, loans, credit cards |
| Other fees for need-based professional development, licensing, and certificates | Take out meals |
| Pricey items that are nonessentials, motorcycle, BMW car, etc. | |
| Business expense |
What happens if students attempt to spend on the “don’ts” or unqualified side?
In some instances, students have been found attempting to use their funds for unauthorized purchases, including expensive items, vacation rentals, takeout meals, alcohol, drugs, and even personal shopping. If the Department of Education and lending institutions discover that the student has engaged in unqualified spending or committed fraud, they have the authority to alert the appropriate authorities and take action against the individual misusing the funds. This serves as a deterrent against diverting the funds for purposes other than education-related and living expenses.
I just wanted to remind you about the importance of being mindful about how student loans are used. It’s crucial to avoid using them for non-educational expenses, as this can lead to negative consequences such as increased debt and potential misuse of funds. It’s essential to take proactive measures to prevent this from happening by providing more education and seminar classes to raise awareness about responsible use of student loans.
It’s important to note that using student loans for unqualified purchases can be considered fraudulent, and there should be penalties in place for misuse of funds that are meant for qualified educational expenses.
As the students graduated from college or university, they will start to pay the student loans back with interest, depending on what type of payment they chose.
I want to take a vacation, but I am unemployed and have no money. What can I do with the money since I have only student loans left?
Lastly, if you want to spend a vacation, get a job, earn more money as I did. After I spent 10 months working as a Specialist, I saved up for my upcoming trip abroad. That’s the way you don’t get penalized for “misuse student loan fund” qualified purchases. Vacation is indeed an unqualified purchase because vacation is “not an education-related” purchase. It is heaping more money taken from those in need of someone’s tuition. It is also unrelated to education-related expenses.
In conclusion, saving up vacations like spring break requires a vast amount of savings from your job. You earn your pay for hard work. You keep your money. And finally, you can save up whenever you want.
The takeaway: Don’t use student loans to save money for vacations.
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