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Student loans can be used for any education-related expenses, which include living expenses during college. So if you have any of those funds left over after college costs, such as tuition and fees, you may be able to use that money to directly pay for what you need.
- How to use student loans for living expenses
- How are student loans disbursed?
- What can student loans be used for?
- What shouldn’t student loans be used for?
- What happens if you use student loans for something you shouldn’t?
- Alternatives to using loans for living expenses
- What to do with leftover student loan money
- FAQ
How to use student loans for living expenses
The first step is getting student loans, so you’ll want to fill out the Free Application for Federal Student Aid (FAFSA) to access federal loans. Your school will use your FAFSA results to determine what federal student loans and other federal financial aid you qualify for.
After you’ve exhausted your scholarship, grant, and federal student loan options, private student loans can help fill any financial gaps left over. If you decide to take out a private student loan, be sure to consider as many lenders as possible to find the right loan for your needs.
| Lender | Fixed Rates From (APR) | Variable Rates From (APR) |
|---|---|---|
Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 4.48%+10 | 6.03%+10 |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 4.43%+1 | 5.8%+ |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
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4.41%+2,3
| 5.49%+2,3 |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 4.43%+ | 5.36%+ |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 6.25%+7 | 8.11%+7 |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 4.6%+8 | 7.37%+8 |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 5.35%+ | N/A |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 4.50%9 - 15.49%9 | 6.37%9 - 16.70%9 |
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your credit score. 100% free! |
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Lowest APRs reflect autopay, loyalty, and interest-only repayment discounts where available | 10Ascent Disclosures | 1Citizens Disclosures | 2,3College Ave Disclosures | 11Custom Choice Disclosures | 6Discover Disclosures | 7EDvestinU Disclosures | 8INvestEd Disclosures | 9Sallie Mae Disclosures |
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See Also: 4 Benefits to Letting Your Student Borrow for College
How are student loans disbursed?
Undergraduate, graduate, and professional students are all able to use student loans for living expenses.
“The student loan process works by a student being awarded a loan through a private company or the federal government. The money pays the school’s tuition and fees, then what is left over gets paid out to the student, unless they decline it,” said Tiffany Grant, an accredited financial counselor based in North Carolina. “Once it is in the student’s hands, they can use it for living expenses.”
Just be aware that there are some exclusions for how you can use those extra funds.
What can student loans be used for?
Student loan funds are restricted to uses that are directly related to your education. Some college-related expenses include things like:
- 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 (bus pass, gas)
- Dependant child care expenses
Before you take out a federal or private student loan to help cover these costs, it’s important to consider how much that loan will cost you in the future. This way, you can be prepared for any added expenses.
You can find out how much you’ll owe over the life of your federal or private student loans using our student loan calculator below.
Step 1. Enter your loan balance
Step 2. Enter current loan information
Step 3. Enter your new loan information to start calculating your savings
If you refinance your student loan at % interest rate, you can save will pay an additional $ monthly and pay off your loan by . The total cost of the new loan will be $.
Does refinancing make sense for you?
Compare offers from top refinancing lenders to determine your actual savings.
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Learn More: Taking Out Student Loans Without a Cosigner
What shouldn’t student loans be used for?
While student loans can help cover quite a few expenses, keep in mind that you’ll have to pay back whatever you borrow. Because of this, it’s important to borrow only what you need so you can keep your future repayment costs as low as possible.
For example, some expenses you shouldn’t use your student loans for include:
- 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
- Anyone else’s expenses (like paying for a friend’s tuition)
What happens if you use student loans for something you shouldn’t?
Financial aid offices don’t track exactly how students use their funds, so it’s unlikely that you’ll get in trouble for using your financial aid or student loans in cases where you shouldn’t. But if you spend more money than what’s budgeted in your school’s official cost of attendance, you could end up with fewer funds than you need to pay for other expenses — such as college textbooks or fees.
The Department of Education does have a hotline where cases of misused funds, like federal student loans, can be reported. In that case, it may be reported as an incidence of fraud, since the Master Promissory Note loan document explicitly forbids misuse of funds.
“Lenders don’t monitor what you use the money on after it passes through the college or university. … However, I will warn you, the funds should not be used frivolously as it is still a loan that would have to be paid back with interest in most cases,” Grant said.
If you’re worried that you’ve already used some of your funds in the wrong way, chalk it up as a lesson for how not to spend funds in the future. You could also consider saving money from a job or other income source to replace those funds.
Alternatives to using loans for living expenses
If you don’t want to use loans to pay for living expenses, there are other options you can use:
- Apply for scholarships and grants: Gift aid is always going to be a good option, the key is finding opportunities and sending in a great application. In general, going after more tailored options (like scholarships for mothers going back to college in your state, or for first-generation college students in your county) may be easier since you wouldn’t be competing with a massive applicant pool, as you would with a national scholarship.
- Get a part-time job: This can be a great way to pay for living expenses during college without taking on debt. If possible, look for an option that uses your existing skills and doesn’t require too much time. That way, you won’t compromise on study time.
- Tap into your savings: If you’re lucky enough to have money stashed away, it could make sense to tap into those funds, rather than take out debt to pay for living expenses in college. The key here is to ensure that you still have at least some cushion so you’re covered if the unexpected happens. (So, it’s a good idea to supplement this option with the other two to preserve some of those funds.)
Other ways to potentially lower your costs overall include:
- Buying used textbooks or renting them
- Living off-campus and getting a roommate (or living at home, if possible)
- Carpooling with a friend who has a similar schedule to you
Check Out: Tuition & Room and Board: On-Campus vs. Off-Campus Costs
What to do with leftover student loan money
It’s best to borrow only what you need to pay for school and related costs so you can avoid excessive student loan payments in the future. But if you end up with extra federal or private student loan funds, there are a couple of ways to handle it:
- Pay it back immediately: This would allow you to save the most amount of money on your loans, since you’d reduce your principal balance and you wouldn’t have to pay interest on that extra amount (assuming you repay it before an interest charge hits your account. This can vary depending on the type of loan, as well as the lender.) With federal student loans, you can cancel some or all of your disbursement within 120 days and return the money to your school.
- Save the money for necessary expenses: If you have fluctuating or limited income, you might have a hard time getting the money you need for rent or other necessities each month. If you know that you’ll need that money to pay for covered costs, like living expenses or a laptop for college, you also have the option to keep that cash and use it over the school year to pay for those costs.
- Use a combination of these two options: “Leftover student loans should be used for any living expenses the student needs to survive, and then the rest should be paid back to the student loan so it doesn’t capitalize once the student graduates,” Grant said.
Learn More: How to Get Student Loans for Past-Due Tuition
FAQ
How can I live off student loans?
Most student loans can be used for any education-related expense, including living expenses. But you should keep in mind that some loans will have limitations on how much you can take out each year, and over the course of your education.
For context, here are undergraduate and graduate student loan limits:
| Loan type | Loan limits |
|---|---|
| Direct Subsidized Loans | $3,500 to $5,500 per year |
| Direct Unsubsidized Loans | Dependent undergrad: $5,500 to $7,500 per year ($31,000 total limit) Independent undergrad: $9,500 to $12,500 per school year ($57,500 total limit) Graduate and professional: $20,500 per year ($138,500 total limit) |
| Direct PLUS Loans | Up to the cost of attendance, minus any other financial aid received |
| Private student loans | Up to the cost of attendance (though it varies by lender) |
Keep in mind that both federal and private student loans have their own student loan requirements. To qualify for federal student loans, you must have financial need and be enrolled at least half time at an eligible school. With private student loans, you’ll typically need good credit and verifiable income to qualify — though exact requirements can vary by lender.
If you’re struggling to get approved for a private student loan, consider applying with a cosigner to improve your chances. Even if you don’t need a cosigner to qualify, having one could get you a lower interest rate than you’d get on your own.
Check Out: What to Do If You’re Denied a Student Loan With a Cosigner
How do I get financial aid for living expenses?
The first step is to complete the FAFSA. This will determine the amount of financial aid that you’re eligible for, based on factors like your student status (independent or dependent), your school’s cost of attendance, and your year in school.
If you’re a dependent student, it will also be affected by your Expected Family Contribution
How should students pay for monthly expenses?
Ideally, you’d get grants or scholarships to cover those expenses, since they don’t require you to pay back those funds and don’t incur interest charges. You have several other options too, including: getting a job, dipping into savings, and using leftover student loan funds.
Should I use a personal loan to pay for living expenses?
While you may be able to use a personal loan to pay for living expenses during school, you should think twice before doing so. Personal loans can have significantly higher rates than student loans, which means they can be more expensive, long-term. Plus, you wouldn’t have access to the federal borrower protections associated with federal student loans, like income-driven repayment and forbearance.
Can I use my student loan to buy a car?
No. You can use student loans to pay for transportation to and from your school, but a new car would not be possible.
Can I use my student loan to pay off credit cards?
No. Student loans cannot be used to pay for expenses that aren’t directly related to education. So using those funds to pay off other debts is prohibited.
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Dori Zinn has contributed to the reporting of this article