Daily Egyptian Reporter 11

Financial advice that Undergraduate Student Government President Dave Vingren offers in the most recent edition of USG’s newsletter may be illegal if it is undertaken, a Financial Aid administrator says.

Vingren’s Taking Action’s column, titled in the issue as Decrease Debt Dave’s Way, suggests that a student should take out a student loan and invest it in a money market fund. After graduation, the column says that the student can pay off the debt and still have money from accrued interest.

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However, Rick Steudel, assistant director of Financial Aid, said if a student acts on Vingren’s advice, the student might be subject to a $10,000 fine with a possible prison term.

Basically, it’s a matter of intent, Steudel said. If the investment is on a short-term basis, where the student is trying to make the money last and drawing on the money to pay for living expenses, it’s legal.

But, if your intent is to use the loan money as capital for your investment scheme, that’s highly irregular.

Vingren says using loan money to invest in a money market account technically is no different than using a student’s loan money to pay for living expenses and freeing up the student’s own money to invest.

For instance, if a student has $3,000 and gets a loan for $3,000, the student could use the federal money to pay for school and invest the other money. It would appear no different than spending the personal money and investing the federal loan money, Vingren said.

Steudel said that according to the financial aid form a student signs, the money must be used for educational expenses during that school year.

You’re supposed to be investing in your educational future, not your financial future, Steudel said.

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Vingren said a student should be able to achieve some kind of financial security to keep from getting too far out of pocket.

I think financial security is a valid living expense even for a student, he said. You need some money to fall back on.

Vingren said he has not followed his own advice of long-term loan money investments, and he does not think he will get in trouble for his column.

I really don’t have much left over, he said, after I take care of my living expenses for the year.