College students: Don’t Take Out Student Loans to Pay for a Luxury Apartment

When I was a child, my parents were poor. That was OK because almost everyone in my little Oklahoma town was poor, and we all told each other that we were in the middle class.

By the time I graduated high school, my parents had clawed their way into the actual middle class, and they sent me off to Oklahoma State University to be “educated.”

I moved my stuff (a few clothes and an electric popcorn popper) into Cordell Hall, an enormous and depressing men’s dorm. I could have signed up to live in a newer dorm–one that had air conditioning, but that would have cost my parents more money.

Reflecting back on that experience, Cordell Hall wasn’t so bad. My roommate and I installed a window fan that kept our dorm room temperature down to a comfortable 85 degrees, and I became friends with dozens of guys who were sweating it out with me in Cordell Hall.

Today, college kids have more housing options. They can live in a university dormitory or move into a “luxury” student apartment complex.

What is a luxury apartment complex? Based on the advertising, it is an apartment building with a “resort-style” swimming pool, a fitness gym, in-unit clothes washers and driers, granite kitchen counters, and big televisions.

What does that cost? A lot. A one-bedroom apartment with a bath can cost $1100 a month or more. Older apartment complexes are cheaper, and students can always cut their costs a bit by sharing a unit. In Baton Rouge, the luxury apartment complexes have lots of five-bedroom apartments for rent.

Millions of young people from low-income families arrive on their college campuses with access to more cash than they’ve ever seen before–cash in the form of federal student loans. If they use some of that loan money to rent a luxury apartment, they can live better than their parents.

What does it matter how much an apartment costs if students take out student loans to pay the rent? And if they max out on the amount of federal loan money they need, they can get their parents or grandparents to take out Parent PLUS loans.

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But hear these words of caution. Students should not take on more college debt just to live in a luxury apartment complex with a swimming pool and a fitness gym.

Why? Because it is easy to get used to so-called luxury living while in college. And students who take out loans to pay for a classy address may graduate to find they can’t get a job that pays enough to support their upscale lifestyle.

If that happens, these hapless students will wake up to the shock of seeing their standard of living go down after they graduate. They may wind up having to vacate their luxury apartment to move into a dump on the wrong side of town–the dump where they should have lived while they were in college.

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