Loans Blog

Loan Refund Checks....How shall I spend it?

You walk in the door and your mail is sitting on the table. Your first reaction is to immediately look away, because from past experience, mail = bills and bills = you owe someone money. As you turn to look away, something catches your eye. The mail seems to have a golden tint to it, like a pot of gold. It could just be your eyes catching a glare from the window, but you decided to get a closer look. As you approach, a smile is growing on your face before you even realize what is happening. Your loan refund check is here! Yay!

This glorious day happens to college students all over the country. This refund check magically appears on your doorstep because your loan covered all your tuition expenses and this is the leftover amount. Now I am fully aware of what all of you are thinking.... There are two ways to handle this freshly cut check for an undisclosed amount; responsibly or unresponsibly. I will go with my initial reaction if I walked in to find a check with my name on it.

Let's go to the bar!!!! The drinks are on me!!! Now I know, I would immediately regret those words as soon as they came out of my mouth, but nonetheless my initial reaction would be to spend it. For students, I believe this would be a common trend. Money for college students is like cheese for starving rats..... I'm sure you get the analogy. This unexpected check is seen as a freebie. Students feel like they have free reign to spend this money on whatever they want. It easily funds a shopping spree, a week's worth of 24-hour partying, and even a spring break getaway. However, if students would think wisely about this refunded money, they would realize that every penny needs to be paid back in the end.

So now it's lesson time! Every cent of the money that you borrow, including interest, must be paid back. It would be smart to have that amount be the lowest possible number it can be. So when you get money back, ideally it should be saved and used to pay back the loan. I know I know....I know exactly what you are thinking. No student in their right mind will put this check immediately into their savings account in order to make their future that much easier. No college student cares or properly prepares for their financial future. I agree. I would just like to make the point that however tempting this check may be, think about how you spend it. Maybe one night of partying would be acceptable, but a whole spring break trip? As students, let's begin to think about our future and prepare as best we can for our financial well-being.

Haha, just kidding.....I'm with you on the spring break trip, just send me the dates!