Resisting Temptation: 7 Things You Should Never Buy With Student Loans
March 19, 2014

College costs are inarguably on the rise, but the amount of student debt is rising faster than the tuition hikes. For some families, this may due to a lowered ability of the parents to contribute toward their child’s education. But for others, they are borrowing beyond the scope of what they need and are increasing their debt loads needlessly. When you sign your loan papers based on your estimated need, this may not represent your actual financial need.

How not to spend your student loans

Tips for saving big with student loans

Any loan amount that exceeds tuition, room, and board payable to the school is returned to you in the form of a refund. This can be returned back to the financial aid office to lower your loan amount, spent on books, or kept to use at your discretion. It’s this third option that is concerning.

In many cases, very young adults are making major financial decisions that will impact them for decades to come and they don’t understand the ramifications. Others are adults who are juggling work and school, and use some of their loans to live on. Borrowing the bare minimum is always the preferred route, but far too many succumb to the temptation to take more than they need and end up in trouble later. Here are seven things you should never purchase with student loans:

#1 Vacation(s)

This may seem like a no-brainer, but some people take their second semester loan proceeds and enjoy spring break. Others may take that longed-for jaunt to Europe. Or it may be as innocuous as a couple of plane tickets each year back home to see the parental units. But no matter what, this should be an absolute no-no for student loan funds.

#2 Car

You may think you need a car for school – or you may simply want one. While you can certainly pile on enough debt to buy one, it’s a bad idea. Along with a car comes fuel, insurance, and maintenance costs. This will add to your monthly budget. Plus a car loan paid off over a decade (or longer) will end up costing you far too much in the long run.

#3 Socializing

If you get a refund check and have some left over after textbooks, you may be tempted to hang onto it. This can become a downhill slide if you use the money to head out to the bar for some after-class beer, buy some concert tickets, go to the movies, or just hang out with your buds. There are plenty of free and fun activities on campus. Save your money.

Cool dorm style

Don’t decorate your dorm on borrowed dollars
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#4 Decorating Your Dorm

Turning your room into your own personal man cave (or lady lair) is something many succumb to. You want a TV or a game system to use in your down time. You may want a nice rug, curtains, and a blanket so your pad looks cool and feels homey. This may feel more like a necessity if your roommate has money to splurge and you feel the need to keep up. Resist the temptation and live like a starving student— you’ll be better for it.

#5 New Computer

This can be a purchase that’s easy to justify to yourself. You need a top-of-the-line computer to research and write your papers, right? The smarter money move is to work a part-time gig or a summer job, and save up cash to buy yourself a new computer. In the meantime, make do with what you’ve got or use the school’s computer lab. It will cost you much less in the long run.

#6 Clothing

You may want to make a big splash on campus or remake yourself into your best version of yourself when you start college. A big fat student loan refund check may burn a hole in your pocket and leave you wanting to hit the mall and do yourself up nicely. This one is pure insanity. A $20 sweater could end up costing you hundreds of dollar before you’re done.

#7 Anything You Can Live Without

The bottom line is that anything not absolutely necessary for your education should be foregone. Borrowing the minimum is the smartest strategy. You have the rest of your life to indulge yourself with clothes, cars, and fancy electronics, but you’ll only be able to afford to live the life you want if you don’t come out of college hobbled by needless debt!

To keep track of your student loans from the first day you borrow through the last dollar you pay back, sign up for’s free student loan tool. Also, check out our blog every day for tips on dealing with debt and our Student Loan Help Center for a lexicon on student loans.