Students spend loan money on everything but not much on school

Student loans are often a hot topic in finance as loan balances have soared, leaving students saddled with extra debt once they enter the job market.

According to Success Magazine, however, at least some of this increase in loan amounts has to do with what students are using their loan money to pay for at school.

Many people assume student loan dollars are going to tuition, books, tutors, and test prep materials. Unfortunately, today’s young adults are spending up to 41.3 percent of that money on monthly bills like rent and cell phones. Another 14.9 percent goes to clothing and other accessories, and 12.8 percent goes towards food.  For those doing the math, that means over two-thirds of student loan money isn’t even going towards the school.

Financial ignorance often plays a significant role in these decisions, and it is the role of parents to educate themselves and their children on the costs associated with student loans and develop financially literate children before they go off to college.