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When you fill out the FAFSA and apply for student loans for the school year, you’re taking on debt to help you pay for college. But what about other college costs? Can you use student loans for anything? Find out everything you need to know about using your student loan funds.
- Can you take out student loans for living expenses?
- What can student loans be used for?
- What shouldn’t student loans be used for?
- Personal circumstances can affect student loans
- What happens if you use student loans for something you shouldn’t?
- Be smart about using your student loans
Can you take out student loans for living expenses?
The short answer is yes. The U.S. Department of Education lets you use your student loans for housing and living expenses while you’re in school. That’s because having those expenses covered lets you spend more time studying and increases your chance of getting a degree.
But the trick is not to get carried away in defining what’s a necessity. Rent, utilities, and groceries? Of course. Netflix, drinks at the bar, and spring break trips? Probably not expenses that you want to pay for with grants or student loans.
When you take on federal student loan debt, you agree to only use the money you borrow to pay for expenses that are included in the school’s cost of attendance. Private student loan lenders typically impose similar requirements, as well.
If you decide to use a private student loan to cover your expenses, be sure to consider as many lenders as possible to find the right loan for you. You can do this easily with Credible — you can compare your rates from our partner lenders in the table below in two minutes.
|Lender||Fixed rates from (APR)||Variable rates from (APR)||Max loan limit|
(depending on degree)
|3.49%+2,3||1.04%+2,3||Up to 100% of school-certified cost of attendance|
|4.08%+8||1.88%+8||Up to 100% of school-certified cost of attendance|
|3.75%+||N/A||Up to school-certified cost of attendance
(depending on school type and minus other aid received)
|4.25% - 12.35%9||1.25% - 11.10%9||Up to 100% of school-certified cost of attendance|
your credit score. 100% free!
Lowest APRs reflect autopay, loyalty, and interest-only repayment discounts where available | 1Citizens Bank Disclosures | 2,3College Ave Disclosures | 7EDvestinU Disclosures | 8INvestEd Disclosures | 9Sallie Mae Disclosures
Even with restrictions from the government or a private lender, it’s OK to use your loans to pay for more than just your college tuition. Here’s what you can and can’t (or at least shouldn’t) use your student loan money on.
What can student loans be used for?
See what your estimated monthly payment will be using our student loan calculator below.
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With a $ loan, you will pay $ monthly and a total of $ in interest over the life of your loan. You will pay a total of $ over the life of the loan, assuming you're making full payments while in school.
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What shouldn’t student loans be used for?
Personal circumstances can affect student loans
Depending on your personal circumstances, your financial aid administrator might increase your cost of attendance to include other expenses like child care costs or the cost of operating and maintaining a vehicle you use to get to and from school (but not the cost to buy a vehicle).
If you’re disabled, your cost of attendance might include expenses for special services you need, like personal assistance, transportation, equipment, and supplies.
When it comes to spending student loans on housing and food, your cost of university attendance will depend on whether you’re living at home with your parents, in campus housing, or in an off-campus apartment or house. If you’re living off campus, the school will estimate “reasonable expenses” for your room and board.
What happens if you use student loans for something you shouldn’t?
The government or your financial aid office won’t tell you how nice of a place you can rent or how fancy your meals can be, but if you spend more money on housing and food than budgeted in your school’s official cost of attendance, you might come up short of funds needed to pay for other expenses, like books.
If tipped off, however, the government will investigate and prosecute those who commit fraud or abuse student loan funds.
Be smart about using your student loans
While you might think of both federal student aid and private student loans as easy money, taking out more for living expenses (or other non-education expenses) is not the answer unless you really can’t get by without them.
If you hit your borrowing limits for the most affordable federal loans, compare private student loan rates offered by lenders before turning to costlier federal PLUS loans. Try not to borrow more than what you expect your annual salary to be after graduation.
Many borrowers are still paying off their student loans well into their 40s and 50s. So be smart when using your student loans to pay for certain expenses. Stick to a budget while you’re in school, take on a part-time job, and don’t take out more in federal or private loans than you need. Just remember: You’ll be paying the money you borrow back — with interest.
If you decide to take out a private student loan, it’s a good idea to shop around and compare as many lenders as possible to find the right loan for you. Be sure to consider rates as well as repayment terms to keep your costs low. Credible makes this easy — you can see your rates from multiple lenders in two minutes.