August 26th, 2011

Sugar Babies & Sugar Daddies: Is This How Bad Student Loan Debt Is?

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“Let’s say you’re a recent graduate, with $80,000 in debt and a job that pays $35,000 a year. It’s tough to pay that amount of debt down, live in a decent city and still be able to socialize and do fun things. But what if all of a sudden, the only sacrifice is the age or success level of your boyfriend or some guy you occasionally hang out with? That becomes a real game-changer in how you get to live your life.”

That’s what entrepreneur Noel Biderman told The Huffington Post to justify his websites and, part of the growing number of “arrangement-seeking” websites that sky-rocketed in membership during the recession. The Post’s expose reveals a shocking trend: Arrangement-seeking sites, online dating sites that pair up rich older men and younger women, are an increasingly popular way for college women to pay off their student loan debt.

How it works

Get ready for a lot of euphemisms.

These arrangement-seeking websites say they facilitate “mutually beneficial relationships” between “sugar babies” and “sugar daddies.”

Prospective sugar babies and daddies sign up for the website, set up a dating profile and start searching and sparking relationships. As the Huffington Post reports, many meet-ups are expensive dinners or fancy weekend getaways. Most of the young women interviewed walked away from that date or weekend a few hundred or thousand dollars richer.

The nature of these relationships is totally up to the participants. The websites claim to offer “companionship and friendship,” and vehemently defend their legitimacy and legality, as well as disassociating themselves from the idea that it’s blatant prostitution (what a stretch of the imagination!).

Taking extreme measures

Is this our last resort in the face of increasing college costs? Young women are turning to online dating relationships and taking up the mantle of “sugar baby” to pay off their college debt.

The average consumer has $30,000 in student loan debt and the average 18-24 year old is saddled with $2,000 in credit card debt, according to Credit Karma’s latest data. The College Board reports that the cost of public and private universities has increased 5-8% yearly. These staggering debt loads and college costs, along with a lackluster economy and weak job market, create a perfect storm of financial circumstances that triggers extreme measures amongst college students.

We can persecute the sugar daddies all day long for exploiting young women’s financial struggles. But I think it’s more important to focus on the young women themselves.

Many of the women are middle-class and well-educated, simply using these sugar baby/sugar daddy relationships as a “temporary, part-time, stopgap kind of measure,” as the Post describes it. It’s the kind of short-term financial action we make, like skipping the mortgage bill or dodging debt collectors, in order to make ends meet. But it’s a dangerously slippery slope.

What we can learn

This is an extreme case of the financial struggles Americans face every day. Whether it’s a family of four struggling to live paycheck to paycheck, a homeowner fighting foreclosure, or maybe an unemployed consumer facing bankruptcy, we must be conscientious and smart about our financial choices. Financial actions have ripple effects that could affect you long term. For example, defaulting on a payment or two may seem harmless or insignificant now, but it could stay on your credit report for seven years and knock upwards of 50 points off your credit score.

Maybe you’re thinking that the average consumer wouldn’t resort to such extreme measures. But a disturbingly high number of college students, hundreds of thousands in fact, have signed up at these arrangement websites. The most extreme option suddenly looked like a real and viable alternative.

I believe this isn’t the only option. More financial education for young consumers is a proactive step; financial aid assistance is another necessary avenue. When all else fails, our last defense is the truth that these young women’s dignity is worth more than their debt.

It’s a tough economy, and some of us are worse off than others. As consumers and as a community, let’s keep taking steps to educate and empower ourselves as well as help others and give advice, so none of us slip through the financial cracks.

What do you think about this trend of college students using dating websites to pay off their student loans? Tell us in the comments below!

Keep up the Karma,

Justine Rivero, Credit Advisor

Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.


  1. The author writes. “We can persecute the sugar daddies all day long for exploiting young women’s financial struggles.”

    Or we could criticize the women for exploiting older men.

    But in my opinion the people who enter into these arrangements deserve each other. They are taking each other off the market which can only benefit those of us (men OR women) who are looking for quality relationships.

    So maybe we should just leave them be. They are grown adults, it’s their choice.

    wazungu4 at 3:59 pm on August 29, 2011
  2. One important thing is that if you are searching for a student loan you may find that you will want a co-signer. There are many scenarios where this is correct because you could find that you do not possess a past credit history so the lender will require that you’ve someone cosign the money for you. Good post.

    Idella Haar at 7:14 am on September 10, 2011
  3. Sugar babies keep evolving. There are tons of educated college girls that fall under the sugar baby category. These girls, have a TON to offer

    Sugar Babies at 5:58 am on October 24, 2011
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