Nine Years

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Ten Awesomely Irresponsible Things to do with Student Loans*

moonshiner (Photo credit: thewhitestdogalive)

Since the Great Recession, millions of college students did the “responsible thing” and went into debt getting an education and now they’re dealing with a double-whammy of underemployment and debt. To make matters worse, the economy has been stalled out at about 2% GDP growth per year, which isn’t fast enough to undo the damage from the Great Recession and still improve our standard of living. For these people, and I’m one of them, it turns out spending loan money on college was a mistake. Don’t make that same mistake, spend your student loans wisely. Spend it on being awesome.

First, let’s be clear: student loans are awful. They can’t be discharged in bankruptcy, they take decades to pay off and the assets they procure are often worthless. However, student loans are an easy way to get a huge sum of money all at once (or over a long period of time, depending on how your college disburses them). Some of my friends racked up a quarter million dollars in total debt before they were finished with school, and they foolishly went to law school. You can be just as irresponsible without doing all that learning…

Instead of wasting your one chance to ruin your life by taking several years to study academic subjects that have no use in the real world, why not ruin your life in an awesome way? Here are ten ways to get the most of society’s misplaced trust in your future earning potential:

1) Take a trip to Europe (or somewhere else). This is actually an almost legitimate use of your student loans. Being well-traveled is part of being a well-rounded person. Also, it’s much easier to learn a language if you’re forced to. Take that trip to Europe on someone else’s dime, and when you get there, take advantage of their lower tuition and get a graduate degree. Even if all you do is take a thousand bucks (or however much you need) and go on a driving tour of the lower 48, you’ll be getting more for your money than that Intro to Lit class you were going to take.

2) Build a personal library. I’m an old-fashioned guy, I know the modern paradigm is not to own any media in physical form: no records, no discs, no books. Every book you could ever read in your lifetime can fit into a small digital device that also acts as a phone. For me, this is nonsense. I want to own a nice copy of all the books I read and refer to in my life. Maybe spending your hard-earned money on this is a bad idea, since the cost of books and movies and songs is approaching zero. So make someone else pay for your library. Purchase difficult to find movies, expensive and collectible records, and first edition signed copies of your favorite books with student loan money. Why pay hundreds of dollars for a biology textbook (when there’s Khan Academy and Wikipedia) only to never use it again, or never use it ever? Get that first-edition of The Great Gatsby. The best part is, some of these items will actually appreciate in value, unlike your college education. And, it’s legal[ish]. Books are part of your education and [generally] a legitimate use of student loan funds.

3) Invest in the stock market. People have soured on stocks, and there’s a strong case to be made that the longterm outlook for the stock market, as Boomers retire and cash-out their investments, is poor. But, in the short-term, taking your excess student loan money and investing in an index fund or buying high-yield dividend-paying stocks (REITs or Tanker companies) could help you get an actual return on your debt. And if you fail and lose all the money? no big deal. You were going to lose all the money anyway.

4) Open your own business. The sad truth of business loans is this: the bank probably won’t give you the money, and if they do and your business tanks, you’ll have to declare bankruptcy to keep from becoming homeless. Instead of spending your student loans taking a course on Human Resources Management, open your own thrift store. Get on DollarDays and start buying stuff. Maybe it works out, maybe it doesn’t, but at least you’ll be getting the real-world experience you can’t get from a business degree.

5) Become a criminal mastermind. It takes money to make money. Maybe you’ll never get enough money for that space station filled with bikini-clad minions, but if you watch a lot of Burn Notice, you know there’s plenty of ways to take a lot of cash and turn it into more cash. Be sure to buy a bunch of books about “how to avoid being scammed” and “Real Mastermind Criminals” and self-teach your way to Evil Geniushood. (This course is better than you think, being incarcerated for more than ten years is one of the few ways you can discharge your student loans.)

6) Disappear. You’ve thought about it. Wouldn’t it be great to leave your old life behind and begin anew? It sure would be a lot easier to accomplish with a bunch of cash. Do your research, read everything you can about changing your identity, then move to the Bahamas (or something). And remember, if you get caught, you might be going to jail, so go all-in.

7) Sail around the world. If you wan to impress someone in just about any context, tell them you’ve sailed around the world. It’s more believable if you actually do it, but you can cheat and just read about other people who did it online. But you should do it for real; most people will never get an opportunity to do this because boats are expensive and it takes a lot of time and money. Some other ideas along this line of reasoning: Row across the Atlantic ocean, become a bush pilot in Alaska, become a demolition derby champion, take up polo, etc. There are so many things rich people can attempt to do that the rest of us can’t. Student loans are the great equalizer: you can do anything rich people can do. (Yes, I know rich people don’t take up demo derby, that’s not important.) Who knows, you might even meet a rich future spouse along the way.

8) Gamble Many students can easily rack up 100,000 dollars in student loan debt. Do you have any idea how much fun that can get you in Las Vegas? Go nuts, start playing the high stakes tables. Have fun until you go broke. The end result is the same: you still owe a lot of money and you have no career opportunity.

9) Become a Moonshiner (or fund your hobby). I like the show Moonshiners. Imagine the kind of still you could build for 40,000 dollars. If you don’t want to make moonshine, there are other options. Do you dance? buy a dance studio. Rock climbing? become a pro. Birding? get your Big Year on someone else’s dime. Motorcycle racing? Whatever you want to do, do it with student loans.

10) Go to college. I’m not talking to you STEM majors; I’m talking to those of you too lazy to learn calculus. College as a liberal arts major might be, economically speaking, completely worthless. But it can be a lot of fun. You have to do it right, though. Only take enough credits so you can remain a “fulltime student” for as long as possible. Normally, this will be about 6 credits a semester. Be sure to take your summers off. It will take 10-12 years to complete a Bachelor’s degree at 12 credits a year. Longer if you switch majors. All this time, you can borrow money with student loans. Eventually you’ll have to switch to private loans instead of Stafford loans, but that’s not a big deal. And once you graduate? get a Master’s degree. Same scam. Get another one after that. If you do it right, get good grades in the classes you take, control your expenses and maximize your loan amount, you can live the good life for 16 years or so. Imagine staying in college for that long, learning all the tricks, attending parties, coed ultimate frisbee. Be sure to attend a large state-school (at least 20,000 undergrad students in a large city) so you won’t “stick out”. Once you’re finally done, you’ll be $200,000 in debt, or so. That’s alright, use your deferments, get on an income-based repayment plan, or just default and learn to make money under the table. It’s not like you were going to amount to much anyway.

If you had to get your parents to co-sign on these loans, save a little money for life insurance so they aren’t ruined by your awesomeness.

It’s just that easy.

*Please don’t do any of this. Some of these suggestions, if enacted, would be illegal and are explicated here for entertainment purposes only.

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• Should the US Reform the Student Loan System? (mint.com)
• Student Loan Crisis Deepens as Debts and Defaults Skyrocket (dailyfinance.com)
• Student Debt: A Necessary Evil (bestcreditrepaircompanys.com)
• How to destroy your credit in college (bestcreditrepaircompanys.com)
• What New Student Loan Repayment Options Mean (mint.com)
• Record number of recent college grads defaulting on loans according to new report (redalertpolitics.com)
• Student Loans Replacing Mortgages As The Credit Cycle Peaks (dailycapitalist.com)
• How Much Student Loan Debt Is Too Much? (money.usnews.com)
• Student Loan Debt Is Creating Generation Of High-Risk Borrowers With Low Credit Scores (consumerist.com)
• More Students Delay Repaying Loans (marketwatch.com)