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Student Loan Money-Don’t Use It To Buy an Iguana

Yep, I bought one while living on student loans!

Yep, I bought one while living on student loans!

It’s back to school time again. Twenty million Americans attend college each year. Sixty percent of those students will borrow money to help cover expenses. As I’ve mentioned before, you need to decide if your college degree will be worth the money. If you are attending college for the sake of attending and have no clue what you want to do with your life, going into debt with student loan money is a bad idea.

If you know your college education is going to further your career or lifestyle, then there’s no shame in having student loans. However, students, you really need to think hard about how you are going to spend that student loan money. Spending student loan money for non-educational expenses will come back to haunt you someday.

Check Please!

It’s been a while since I’ve been in school, but the loan process worked like this. We had loan disbursement day where you went into a room with a school official who gave you a bill for your tuition and fees. That money got subtracted from your loan amount, and you were handed a check for the balance. This was supposed to pay for housing, books, and other expenses.

Other Expenses

It’s the other expenses that you can control. Take a look at some of my horrible examples to learn ways not to spend your student loan money. By and large, I didn’t ever borrow as much money as I was offered. I tried to decline unsubsidized loans when I could, but I do admit to using student loan money for some stupid reasons.

  • Gambling-When I went to optometry school, we were an hour away from Tunica, Mississippi, the seventh highest place for gambling revenue in the US. A bunch of students always made a Tunica trip right after student loan disbursement day. I think the most I ever lost was $100 at a time, but still, pretty dumb right?


  • Buying a Pet-During my third year of optometry school, I paid almost $300 for a dog. We won’t even talk about the iguana I thought I needed for some strange reason. This was before I learned the beauty of adoption, but even if it was free, there are tons of pet expenses to consider before actually getting one.


  • Retail Therapy– I can’t tell you how many times I went shopping after a stressful week or a big exam. I told myself deserved it, but I should have just gone for a walk.


  • Gym Membership– In optometry school, I always paid for a membership to Gold’s Gym, not because of their collection of free weights and the meat market atmosphere, but because they were open late. There was a perfectly good free gym at school, but it closed earlier than I wanted to work out. I thought I wouldn’t  have energy if I exercised in the morning. If I had adjusted my plans just a little, I could have saved a ton of money. Ironically, most of my workouts are before 7AM these days.


  • Entertainment-I can’t tell you how many concerts, dinners out, or other events I attended. My philosophy was work hard, play hard. I wish it had been work hard, save more.


I could go on and on. I didn’t need any of these things, and when you pay for something with student loan money, remember you are adding up to 8% interest on public loans and more for private ones. You will be paying for your stuff long after it’s been used up and discarded.

But You Only Live Once…..

Now, I’m not saying you have to be a total miser, sitting at home, eating ramen, thinking of ways to steal toilet paper from the school restrooms. Having a social life and experiencing new things should be a part of college. I would challenge you, however, to find ways to fund non-necessary expenses without using student loan money.

But I Have to Study!

Yes, if you are a student, keeping up your GPA to graduate is your full time job and the most important thing you can do, but do you really spend all of your spare time studying? I thought not.

I could have always had a part time job while in college, even if it was a crappy one. I thought that because I had scholarships, I didn’t need one. Even if you don’t want a regular scheduled position, there are tons of ways to earn money in college.

  • Seasonal retail jobs you could do over holiday break.
  • Work study
  • Be a lifeguard
  • Make money online
  • Clean offices-I had a friend who started bidding on commercial cleaning jobs for small offices. She ended up having to hire employees because she had too many jobs!
  • Babysit-My sister works part time and hires a college student to watch her kids. The sitter arranges her classes around the days when my sister works.

You’re college material. Come up with something.

If you take time spent from one or two days a week when you normally go out with friends, watch TV, or do keg stands, how much extra time would that give you? Look at however you use your down time and find a way to earn some extra cash. I bet you won’t need to use student loan money for non-education expenses.

Better yet, you could take a page from Emily’s book and invest your extra money to pay off the loans you do have to take. I bet if you work harder for that money than just signing your name for a student loan check, you might be less likely to spend it on stupid stuff.

What crazy things did you spend student loan money on? Looking back, would you do anything different with student loan money? Ever had a pet reptile?


About Kim Parr

Kim Parr is a private practice optometrist, freelance writer, and personal financial blogger. You can follow her journey to 20/20 financial vision at Eyes on the Dollar.


  1. It’s not uncommon to hear students once they are finished their education talk about their debt. They reflect on their student loans and just where the money was spent. Time and time again many of them wish they had spent the money more wisely. I hope students take a hard look at personal finance and budget their way through school so when it’s done and over with they don’t have those regrets.

    • I wish they had some sort of documentary about stupid ways to spend your loan money that was required before you could take out loans. I never really thought too much about it at the time, but certainly didn’t enjoy the last 13 years of paying them off.

  2. So sad about the gambling trips. Here it is the same on payday the guys just drink it or blow it and the women are left with pennies to take them through the week. There should be an exam for students to see if they are capable of handling such big loans and until they understand APR, deferred periods and the like make the lender only pay tuition directly to the college so they learn how to live with less. Thanks for the mention!

  3. I went to community college and never had to take out student loans. I also never finished but that’s a totally different story! 🙂 I still like the idea of bidding on commercial cleaning jobs and hiring them out. That sounds very lucrative!

    • The commercial jobs were pretty sweet because the offices were never that dirty and no one was around when she was cleaning. I think that might have been the perfect job.

  4. I went to university right down the road from the local casino. Every Monday I had a 4 hour break where I would normally go to the casino and gamble for 2 hours, then go have lunch, then go to the pub for the last bit before heading back to uni.

    VERY expensive times…

  5. I don’t remember getting an actual check deposited into my account, but I know my wife did. Therefore I don’t have a great answer for you, but I did play a lot of poker my freshman year of college. Thankfully I was on the winning side of that, though.

    • You could have been right there in Tunica! I never really learned poker or table games other than blackjack, but I had some friends who won a few thousand on them.

  6. Oh, do I remember those days! Not so much exactly what I spent the money on ( but I’m sure it wasn’t good) but just walking into that office and being handed that huge check. That was the first time I’d ever seen so much money! I’m guessing the mall was my first stop. I do remember having an exquisite wardrobe in those days. 🙂

    • That is funny how my clothes were much nicer and stylish in my college years. I guess when you don’t have many responsibilities, that seem more important.

  7. I know people that lived pretty lavish lifestyles on their student loan excess! I can only imagine that they weren’t very happy about it once the bill actually came due =/

  8. While I did take out student loans, I never had the experience of getting a check. All my loans went to tuition and I used the money I earned doing workstudy for pocket money.

    I actually would NOT recommend a student investing money she had borrowed, even though that’s what I’ve done! Phrasing it that way make me realize its risk in a new way. We are in a different situation than the one you have described here – we are employed (i.e. have money coming in) and have plenty of other savings. We could still pay off the loans in full from other savings even if our investments tanked. We knew going in that we might lose principal (and we did, at first), but we wanted a learning experience.

    Then again, if the choice is between investing it and literally wasting it, go for the investment. But better to not take out all the money or put the balance into a cash-equivalent.

    • I think I maybe didn’t explain myself well enough. I know you guys have the money to pay the loan back tomorrow, but are investing it for the extra cash, which I think is really smart. I think my point in this post is that you might be able to earn enough money from side income or working part time to pay back some of the loans before the interest hits. I wish I’d done that.

  9. Student loans seem to be a source of spending money for a bunch of college students. The only problem with that is, that iguana now comes with interest! I’ve gotta say, there’s a reason student loan debt is such a big issue for many and, it has to do with how they spent the loans when they got them. I did know one guy who took his extra money and invested it. He was earning more than the interest that was to be charged and, when he graduated, he paid off over 80% of his loans with the 40% or so that he saved. Now, that’s a good way to go! Thanks for the great read!

    • I’m not sure I would have had the guts to do that, but I did have a classmate a few years behind me in optometry school who did that with her loan money. Her dad was really rich though and saw it as a no interest loan.

      • Hey Kim, I wouldn’t have the guts for something like that either. Also, it’s always a surprise to me how wasteful the rich kids can be. It really is a shame. I’ve got a positive story about one though. A friend of mine was part of a rich family that owned a lot of car dealerships in Wisconsin. Not only was he the nicest person you could meet, he was incredibly frugal. I guess he was one of those good rich kids, the rich kids with guidance!

  10. Oh, I did my fair share of stupid things with my student loan money. From concerts, to travel to just plain crap I spent it on way too many things not education related. I just wish I could go back and shake my younger and much dumber self.

  11. I was fortunate enough not to have student loans, but my big spending was sorority type stuff and eating out. I ate out more as a broke college student than I do now. I think there are so many online type ways to make money now as a college student that I’m actually a little jealous we didn’t have that back in “my day.” I mean no one even had a personal computer back then, we had to walk to the computer lab and use DOS commands (not kidding!). And it was a super small town which meant a lot of us were competing for the same waitressing jobs. That being said, college was also cheaper back then.

    • One of my first college class assignments was to send an email! There were tons of jobs where I went to college. It was the Bill Clinton years when everything was booming. I’m sad to say I rarely took advantage except during the summers.

  12. I don’t remember using my student loan money for anything other than school bills and textbooks. I had a campus job that helped me cover most of my other expenditures. And yes…years ago I babysat a pet iguana in my classroom for several years. Thing got pretty big before it retired to a student’s home.

    • Mine was huge by the time I gave it away. Not cute at all. He bit me and lashed his tail at me anytime I tried to clean his cage. Evil, evil lizard. I guess he missed his home in Central America or wherever the pirates stole him from.

  13. I was frugal even back in school…but I know people who used student loan money that was intended for tuition go towards a car and spring break vacations. Their mindset was that they were living for today and that once they had a job, they could pay it off in the future.

    • That is a terrible mindset, but one that almost all my fellow students had. We’ll get a good job and pay it all back in no time. What you don’t realize is that you will want to buy a home and lifestyle inflation will come at at warp speed. It’s hard to say no. I wish I had been able to realize that at the time.

  14. Where were these posts when I was in college?? As a matter of fact, where was the internet?? I used my loans to pay rent and my meal plan, etc. To think that 20 years later I am (finally) almost paid off…my food ended up costing quite a bit!

  15. It’s amazing to me that financial institutions ever started granted people such high sums of money at one of the most irresponsible times in their young adult life without any major restrictions or strings attached as to what the money can and can’t be used for. Even the government makes these kinds of stipulations in their prepaid programs and on some 529 college plan pay outs. I guess that’s why our generation is incurring as much debt as it is from student loans.

    • No kidding. You should have to submit some sort of plan as to how you are using your money and that’s all you get. No money for shopping or reptiles!

  16. I spent money on clothes while taking out student loans. I could have spent less on clothes and then taken out less in loans!

  17. I was lucky enough to get through school without taking out any loans, much respect to those that have worked hard to pay off their loans, not an easy task. I know for a fact that I would have owned 4 iguanas if I had student loan money to blow. I was not real financially smart when in college.

    • No, if you’d had one, you would have never bought another. Mine was the devil incarnate. That lizard bit me a million times before I finally gave it away.

  18. It’s really that excess amount that causes problems. At that age, who wouldn’t spend the money? A lot of kids haven’t been taught how to budget or make good money decisions. They were only told “no” and weren’t always given the best reasons as to why. This is their first taste of freedom and a chance to make-up for all those times they thought they were deprived. I made money mistakes in college too and the sad part is so many kids don’t even realize they are making mistakes until it’s too late.

  19. I have a sister who had her college 100% paid for, but still took out student loans. That means 100% of the $40,000 she took out in loans was spent on non school-related things!

    • That’s what I’m talking about. In optometry school, I could have borrowed twice what I did. All you had to do was go ask for more money. It was in the form of unsubsidized loans, but who’s counting.

  20. In grad and undergrad, any other leftover money I got I needed so badly for rent or what have you that I never thought to spend it frivolously. Except for one semester–the one I went abroad. I took out an $8,000 loan that I probably easily could have cut $2,000 off because I did spend a lot of money frivolously. But I was in the Netherlands! So yes, I regret having that additional $8,000 loan, but it was an awesome semester abroad and I can’t complain about that.

  21. The one and only additional expense I incurred in college was joining a fraternity. Was it crazy? Absolutely not. I developed long and lasting friendships.

  22. I knew a few people that would get student loan checks. However, I never received any check. I only took out loans for part of my tuition (thanks mom and dad for housing) so no check was ever cut. I didn’t even understand that student could use student loan money for such things. I worked a good part of college part time. Sometimes I regret the time I put into it. But most of my jobs were easy and allowed me to do my school work while on the job. My roommates who didn’t work just watched a few more Law and Order marathons all day than I did. 🙂

    • I didn’t take loans in undergrad, so I’m not sure how that worked, but for a professional school, they really allow for you to borrow all your living expenses, regardless of parental income. I guess they think you aren’t able to work, which is true for some parts, but not the entire program.

  23. It’s often alarming what young people will do with money…even if it’s borrowed! Kind of puts in perspective how potentially dangerous it is for people to be taking on huge loans at a young age without financial experience.

    I’ve heard of people looking at student loans as interest-free loans. I’ve also heard of someone taking tuition money from parents and tricking them into believing he was taking classes. Meanwhile, he just lived in the college town and hung out all the time with his girlfriend. Crazy stuff!

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