my dad worked in student loan collections when i was young, eventually moving up to being one of the guys that goes after corporations that don't pay their taxes, and he'd tell me these stories all of the time.

people would take out student loans to buy sports cars, then crash the car in a night of partying.
they'd gamble it all away in one night.
they'd go out of town on trips.
they'd spend it on drugs.

he saw all of this first hand - he was the guy that had to do the investigations, which often involved kind of pseudo-detective type work, write the reports and ultimately explain to the government where the money went. he'd call the car dealerships. he'd find the receipts from the travel agencies. he'd get the police reports.

his stories were outrageous - often crowd pleasers at parties.

and, these were people that got admitted into good schools, in many cases.

it's a fact of life: when you take a poor person and give them a chunk of cash, there's a high chance they're going to blow it on beer and popcorn.