Every semester students await the the day that financial aid refunds will be dispersed. The University of Southern Mississippi financial aid office distributed refunds for eligible students Aug. 29.
Many students choose to spend it all at once, while others may choose to deposit their cash into a savings account. Whether the former or the latter better describes your spending habits, we could all be more fiscally responsible. The question at hand is: how can students spend their refunds responsibly?
David Williamson, USM director of financial aid, said in order for students to spend their refunds responsibly, they must be familiar with their business services account. Students should make sure that their anticipated expenses have been thoroughly covered because expenses such as library and clinic charges are sometimes delayed.
“Students should make sure that they do not have outstanding charges because this can block enrollment for future semesters,” Williamson said.
Although most of student refunds go to student living expenses such as rent, it would be wise for students to set about $500 to $1000 aside for emergencies. Williamson said it would be great for students to make payments on their loan interest, but only if it will not hinder their current expenses. If students are able to begin paying on their loans, they can go to StudentLoans.gov and click on the repayment option.
Steven Stelk, assistant professor of finance at Southern Miss, suggests that students make a budget for the entire semester. Once the student sees how far they can stretch their refund they may find that most of it is already spent. Stelk said it may be tempting to use student refunds for pleasure such as going out to dinner, but it is better to spend money where it is most needed before treating yourself.
Stelk said he sees nothing wrong with using the money to study abroad if the student believes it is the best use of their refund. If the student feels that they will not have any regrets about using the money to travel, they should go for it. He said that students should be precautious with their refunds and only borrow money that they truly need in order to subsist throughout the school year.
Jasmine Johnson, senior health administration major, said during her freshman year, she spent her entire refund within the first two months. She did not like the feeling of being without money, so she learned to budget responsibly. Johnson now takes her refund and divides it into five months. She uses the money each month for emergencies. If she does not have an emergency that month, Johnson enters the money into her savings account.