Jake Lowry said enrolling at the University of Southern Maine this semester wasn’t a matter of choice, but a matter of financial stability.

The junior English major said in the face of a poor job market, attending school and taking out enough loans to receive a large refund check was the only way to ensure he could pay for rent, heat and food in the coming months.

“We go into debt because it’s kind of the only choice,” Lowry said.

Every semester, the Student Accounts Office sends millions upon millions of dollars of these refund checks to students. Last semester, the office sent 7,416 checks to students at a total of $14,730,031, according to the office. So far this semester, the number of checks have reached 5,356 students at $13,325,779.

While the refund money is legally supposed to only cover a student’s cost of attendance — including room and board, transportation, books, supplies and miscellaneous costs like food and entertainment — it’s hard to know how students use the money, said Director of Financial Aid Keith Dubois.

“It becomes very difficult to track,” Dubois said.

The refund happens as a result of a “credit balance,” when the student’s awarded federal aid exceeds the charges to the school, according to the 2010-2011 Federal Student Aid Handbook. The Student Accounts Office sends out a refund check to students if the loan amount is greater than the bill from the university. If the surplus is determined before the beginning of the semester, refund checks are sent 10 days before school starts.

For his first two years of school, Lowry said he was able to take out the minimal amount of loans to cover school because he had a job at a call center. Now that he’s moved on to a job that sees little work during the winter, he said he took out an extra $3,500 in loans to cover his living expenses for the semester.  However, $300 of that check was used for the vinyl pressing of his band’s latest album.

Lowry said he finds this situation problematic because the high unemployment rate for recent college graduates hinders their ability to repay loans.

A recent report from the Georgetown University Center on Education and the Workforce found the unemployment rate for recent graduates at 8.9 percent, though the unemployment rates were lower for majors tied to specific occupations like engineering and health care.

When the financial aid office hears about a student spending the loans on non-educational expenses, Dubois said the office has a responsibility to report potential fraudulent activity to the Office of Inspector General at the Department of Education. He said this means any sort of expense unrelated to education, including business investments. Students agree to only use federal aid for educational purposes when they sign documents like promissory notes for loans and the FAFSA application.

“The bottom line is that financial aid cannot be used for non-educational purposes,” Dubois said.

There have been a few instances where students have been reported for illegal use of refund checks, Dubois said. But otherwise, there’s no way to tell unless the office receives a complaint.

When Brittany Adrien, a junior pharmacology major, got her refund check of over $1,000 this semester, she said she spent it on accessories for her car, including rims and a new stereo system.

“It wasn’t the best way to spend it, but I wanted to reward myself,” Adrien said.

She said she justified it because she works a part-time job on the Portland campus on top of working a full-time job while going to school full time. In addition, she said she paid her own way for her first two years of school and from Kittery most days of the week.

“It’s hard work but it’s definitely going to pay off,” Adrien said.

In addition to tricky legal ground, Dubois said students who spend their refund money on things outside the cost of attendance should be wary of any emergencies that might happen during the semester. For example, if a student’s car breaks down, and they already spent the refund money on something else, where will the repair costs come from.

“That’s hard for a lot of us when we’re just starting to take care of the bills,” Dubois said. “We’ll help them with a budget.”



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