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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.

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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.

But 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?

  • Tuition
  • Fees
  • Room and board
  • Housing utilities
  • Housing supplies and furnishings
  • Meals and groceries
  • Books
  • Equipment
  • Supplies
  • A personal computer you’ll use for school
  • Transportation costs
  • Dependant childcare expenses
  • Miscellaneous personal expenses

What shouldn’t student loans be used for?

  • Vacations and travel
  • A new vehicle
  • Down payment on a house
  • Entertainment
  • Dining out often or expensive meals
  • A new wardrobe
  • Small business expenses
  • Your other debt
  • On anyone else (like to pay for a friend’s tuition)

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.

About the author
Jamie Young
Jamie Young

Jamie Young is a Credible authority on personal finance. Her work has been featured by Time, Business Insider, Huffington Post, Forbes, CBS News, and more.

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