Student Loans: 3 Surprising Ways Debt Diminishes Campus Life

Part three in a series on college kids and money, based on an interview with Stephen Seaward, an expert in financial education. Find part one here, part two here and part four here.
Running up credit cards and taking out more student loans than you truly need may be fun at the time. But it's not just payback that sucks; it's how such debt limits life both now and in the future.

"The decisions a student makes about money can have a profound effect on their personal life," says Stephen Seaward, director of career development at St. Joseph's College in West Hartford, CT. "When freshman come to orientation part of what I do is talk about the financial piece of life."

The average age of those who file for bankruptcy in the U.S. is just 38, and the typical filer has achieved an above-average level of education, according to BankuptcyAction.com. "You have to have been making some bad choices early in life to get to that point at that age," says Seaward.

Many of the bad choices center on student loans and credit card debt, which is why Seaward is so concerned with the financial know-how of students. He notes three specific ways that excessive debt limits a student's ability to live well.

1) Finding (and keeping) a soul mate
Seaward asks students to consider a scenario where they meet someone special and begin to imagine spending the rest of their life with that person. "But then your prospective significant other says, 'Oh, by the way, I have $110,000 in student debt,'" Seaward says. "How do you feel about the relationship now?"

The kids pretty much all shake their heads as if to say no way. "So then I ask, 'How do you think someone is going to respond if you're the one saying I love you very much and I want to spend the rest of my life with you. But you should know that I have $85,000 in loans and credit card debt?"

Most students have never thought of debt this way and Seward says, judging by the looks in the kids' eyes, love is not always blind. "Most seem to conclude that if they meet someone with a lot less debt their life will be easier."

2) Holding on to adult freedom
Another point Seaward makes is that the freedoms students enjoy on campus, and which they presume to be permanent now that they are adults, can prove fleeting. Largely due to high debt loads, between 60% and 85% of college grads boomerang back home with their parents for a while, surveys have found.

"You're living on campus and you're living independently," Seaward says. "You come and go as you please. Then you graduate and you realize that you can't afford your own place. You have to move back home with Mom and Dad. I ask the students how they would feel about that and the vast majority shake their heads. They really don't want to have to move back home." Yet the statistics say they will if they don't keep their debts under control.

3) Enjoying college life
First of all, to get the most out of school you have to stay in school and that, it turns out, is an unusually difficult task for kids taking on a lot of debt. Financial pressure is easily the top reason for quitting school. Money issues are cited by 38% of dropouts, according to the National Center for Public Policy and Higher Education.

"Students being in debt can create an inordinate amount of stress," says Seaward. "And from stress you can spiral into depression. That obviously impacts academic performance, and now along with the stress maybe you have to work more hours, which further takes away from study time." Indeed, among students with credit card debt 65% work part-time and 19% work full-time while among students with no credit card debt just 48% work part-time and 11% work full-time.

There's nothing wrong with having a job while in college. But when you log a lot of hours you miss more than quality time in the library; you miss the other stuff that makes college a blast. Says Seaward: "College can be a very enriching experience. But if you're worried about how you're going to fund your education then you're not going to participate in some of the programs that round students out -- like getting involved in student government or the theater group or some other leadership experience that might help later in the job market."

In other words, perhaps you've limited your life more than you really needed.

Photo courtesy Flickr user alancleaver.

In this series:
· Part One: How One College Turned the Student-Debt Tide
· Part Two: How College Debt Limits Career Options
· Part Four: Common Money Mistakes in College
More on MoneyWatch:
· 8 Ways to Wipe Out Your Student Debt
· Student Loans: How They Changed One Life for Decades
· Student Loans: How They Changed Another Life for Decades
· Student Loans? First Pass This Test
· College: The Flawed Case Against Getting a Degree
· The Top Reason Kids Don't Learn Money at School
· Teaching Kids About Money, What We're Up Against