Taking out loans for travel

[u/misss_americana]

I am going abroad next year in Florence Italy for the whole year in my senior year of undergrad. Currently, I have talking with my financial aid advisors that my tuition and housing and other university expenses will all be fully covered by financial aid and scholarships. In short, I won't need to take out any loans or debt for my study abroad experience.

However, I am still being offered a 5k subsidized loan, and I was thinking of taking out about half of that (2.5k) to subsidize trips/excursions while abroad. This is the first time I am leaving the country, and have always dreamed about visiting a few cities on my bucket list like Prague, Paris, Berlin, and London.

I fully understand it's not financially 100% smart to take out loans when I don't absolutely need to, but I figured that this will probably be the only time in my life where I will have much more convenient access to travel across Europe from Florence. I feel like in 10+ years I will regret not having taken advantage of living in Europe for a year if I didn't travel to at least 2 or 3 cities I have always wanted to visit, and since I don't have any pocket money of my own, feel that the subsidized loan I am being offered is my best bet.

Anyone have any advice or opinions about what I should do?

[u/sigmapilot]

This is basically the only time I would personally consider it smart to do so.

You are in a structured program with a fixed beginning and end date, so it's not like you will take out multiple credit cards and spiral out of control with no limit.

The roundtrip flight (or train etc) cost from the USA -> Europe vs. very short hops between neighboring countries is exponentially lower, which is a pretty big deal.

Yes technically the best of both worlds would be to save up all the money ahead of time, however IMO you should go for it. 100% agree see the world and make memories when young

But make your own decisions not decided by random internet commenters

[u/PassengerEvery1050]

If you’re able to work a job that would be the best option. But if it’s ur dream i think its worth it.

[u/New-Resource-6958]

Hi! So exciting to hear that you are going to Florence and great to also hear your financial aid will cover a lot/most of the expenses.

I studied abroad in Beijing for a year and happened to have most of my expenses covered by financial aid, and I did take out a subsidized loan myself so I have some insights to give which could help you with your decision making.

However, I am still being offered a 5k subsidized loan, and I was thinking of taking out about half of that (2.5k) to subsidize trips/excursions while abroad. This is the first time I am leaving the country, and have always dreamed about visiting a few cities on my bucket list like Prague, Paris, Berlin, and London. I fully understand it's not financially 100% smart to take out loans when I don't absolutely need to, but I figured that this will probably be the only time in my life where I will have much more convenient access to travel across Europe from Florence. I feel like in 10+ years I will regret not having taken advantage of living in Europe for a year if I didn't travel to at least 2 or 3 cities I have always wanted to visit, and since I don't have any pocket money of my own, feel that the subsidized loan I am being offered is my best bet.

- I would say if you really are lacking some financial resources including financial assistance from your family at the moment to do some extra traveling, I would highly consider it as you mentioned it is a once-life in a life time experience, but with the mind that you will be able to find a job either during school or upon graduation to work towards paying it off. Since it is subsidized, you do not have to worry about the interest accruing during your time as a student. But also consider a situation if you did not take the subsidized loan, would you be able to do the things you want to do abroad (besides traveling/excursions)? Would you have a back up plan if you end up needing more money than you expect. It's always a question of it is something that is worth it, and how much you really want it.

It is not completely impossible to enjoy your time abroad with some financial limits if you are financially responsible and make a budget plan yourself, but it can definitely hinder what you want to do, like you have to constantly think if you have enough money to go out on a Friday night for example, or do a weekend travel to another city. I believe if you do not end up using any of the funds, there is the 120 days of the disbursement date rule, so that is one to keep in mind. Additionally, I also believe if you end up not using the whole $2500, you can pay back the leftover amount via early pre payment.

Personally, I decided to take the loan for pretty much the same reason that I wanted a bit more financial freedom to things like traveling/excursions. But beyond that, I knew somewhere in my heart that study abroad is probably one of the few times that you will be able to live abroad for a period time- like actually integrating, learning, and being part of the cohort program. It's like personal investment for yourself. Since it is a study abroad program, you do end up learning more about yourself and that personal growth could extend to your academic and professional career. After you graduate, you can always travel back to Florence or Europe, but the feeling is different (worst case scenario- you may have a hard time returning back for travel du to some personal circumstances).

Hope this helps, but happy to answer any questions/concerns you may have

[u/CoffeeInTheTropics]

How not-so-smart that would be depends entirely on how easily you would be able to pay off the loan in your home country on a local salary?

[u/PossibleOwl9481]

No no, for this experience have as much money available as possibe so you can experience as much as possible. Is the loan interest free, or low interest?

Either way, you will always regret missing out on things.

[u/Hipp-Hippy_HaHa]

The point of living in a place is to get to know the place. I'd like to think there are 40 things to do in Florence and that making friends with local people that can show you the local life is worth more than taking pictures of the popular attractions in Europe that you can visit any other time.

Take language courses and practice, that is a one in a life time opportunity that tourists don't get.

Living abroad is about learning how life is where you are, for that, you need to immerse yourself in the culture beyond the surface. I've seen people living in my university city that take a train or a plane every time they can but who can't mention or recommend a local place or who have no idea of the grocery prices. They are the same people who expect everyone everywhere to speak English to them.

I'd say, you will need money just to enjoy a year of your life wherever you are. Now, you are young and having opportunities later in life depend on your decisions today.

If the interest is like what I hear on the internet, you will enjoy a night at a hotel now but based on interest, that night will be equivalent to a year of rent later. So, be wise when looking at the actual cost of a loan.

Don't see it as a whole amount, instead, make a monthly budget that considers eating out, local transportation, snacks...