Auburn University at Montgomery’s Alpha Gamma Delta Chapter invited me to speak to their sorority this week about finances. The number one growing problem I see in my practice is student loan debt.
A recent survey by LendEDU found that of 500 students surveyed, that 30.6% of college students with outstanding student loan debt said they had used funds provided by the student loans to help pay for their spring break trips this year. The amount of student loan debt in the United States is a growing concern. In a prior study, LendEDU found that 49.80% of college students incorrectly believed the government student loans would eventually be forgiven. Students believe they are using government money to pay for spring break and expect the debt will eventually be forgiven! If it sounds too good to be true—It is, as the saying goes!
Another study indicated 51.20% of parents have cosigned on their child’s student loans which ultimately affect the parent’s credit if payments are made late or not paid at all. Many times, a parent’s ability to retire is affected by a child’s inability or failure to pay back the student loan debt.
Using student loan money to fund a great time at the beach is certainly not illegal but definitely not WISE. A college student should minimize the amount they borrow during their college years and live within a sparse lifestyle. The average college student graduates with student loan debt of $28,000 and the default rate on these loans is 11.8% according to LendEDU.
Be WISE when it comes to getting student loans. If you must get student loans, get the amount necessary. Do not spend student loans on a great spring break that will not be eliminated but will be repaid with interest down the road.
Please call one of our Bond and Botes offices today for a free consultation to see if we can help you!
Gail Hughes Donaldson is a Managing Partner of the Bond & Botes Law Offices in Montgomery and Opelika, Alabama. She holds a Bachelor of Science from Auburn University at Montgomery, and a Juris Doctorate from Thomas Goode Jones School of Law. She’s been helping families work through the bankruptcy process since she started with Bond & Botes back in 1993 as a paralegal. Read her full bio here.