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Student Loan Forgiveness Recipients Likely to Spend On Nonessentials Like Vacations

October 31, 2022

By Corinne Murdock |

Recipients of President Joe Biden’s student loan forgiveness program appear to be wrestling with shoulder angels and devils over how they should spend their relief funds.

According to a recent survey of 1,250 applicants by Intelligent, 75 percent expressed interest in spending on essential items like groceries while 73 percent expressed interest in spending on nonessential items like vacations. 60 percent of these applicants said that student loans had an adverse impact on their life.

66 percent were likely to pay off their rent or mortgage, 65 percent were likely to pay off credit card debt, 62 percent were likely to fund transportation costs, 60 percent were likely to pay off medical care or other debts, and 40 percent were likely to pay for childcare.

Comparatively, 52 percent were likely to buy new clothing and accessories, 46 percent were likely to go on a vacation, 46 percent were likely to eat out, 44 percent were likely to buy a smartphone, 43 percent were likely to invest in the stock market, 42 percent were likely to buy gifts, 36 percent were likely to buy a gaming system, 30 percent were likely to finance their wedding, 28 percent were likely to buy drugs or alcohol, and 27 percent were likely to go gambling. 

Despite 73 percent of respondents saying that they would spend their forgiveness funds on nonessentials, 73 percent also said that doing so would be wrong. 84 percent of male respondents were likely to spend on nonessentials, versus 65 percent of female respondents; 80 percent of male respondents said that doing so would be wrong, versus 67 percent of females. 

Twice as many Democratic applicants as Republicans insisted that these types of expenditures were acceptable. 

The Eighth Circuit Court of Appeals blocked Biden’s student loan forgiveness program earlier this month (Missouri v. Biden). Despite the hold, the Biden administration told reporters that it continues to accept and review applications. 

Biden predicted last Thursday that the order would soon lift, saying that his administration would be mailing checks sometime this week or the next. The funds wouldn’t be mailed in check form, but would be applied directly to their loan balances. 

The president criticized Republicans for fighting the controversial program. 

Nearly 22 million of 40 million eligible borrowers have applied for student loan forgiveness. Over 1.3 million Arizonans at least are eligible for relief. Applications don’t close until the end of next year. 

On Monday, the Biden administration announced reforms to other student loan forgiveness programs, such as relief for those victimized by colleges with false advertising or other forms of fraud. The administration also reformed rules for student loan forgiveness for government and nonprofit workers. 

Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.

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