How to Use Student Loans for Living Expenses

Student loans are intended to pay for college, but education costs include more than tuition. You can also use student loans for living expenses.

You’re limited to borrowing an amount that equals your school’s cost of attendance, which is tuition and fees, books and supplies, room and board, transportation and personal expenses, minus any aid you receive.

Each college determines its cost of attendance, which covers expenses for one academic year and is adjusted yearly. Schools calculate numbers for on-campus, off-campus and commuter students, as well as for in-state and out-of-state tuition.

Any financial aid you receive, including federal and private loans, is disbursed directly to your school, which takes out tuition, fees, room and board if you live on campus. Remaining funds are distributed to you, according to your school’s policy. You may then return any funds you don’t need or use the money for living expenses, transportation, and books and supplies.

The following examples are compiled from guidance set by the Federal Student Aid office and private student loan lenders.

What can student loans be used for?

• Tuition and fees

• On-campus room and board

• Off-campus housing and utilities

• Transportation, including gas, tolls, buses and trains

• Books, supplies and equipment related to your major

• Miscellaneous personal supplies, including toiletries and medication

• Housing supplies, including linens, a microwave and dishes

• Groceries

• Care for dependents, as long as you let your school’s financial aid office know this allowance should be factored into your aid package

• Fees for professional testing, licensing and certificates

• Study abroad program costs

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What you shouldn't use your student loans for

• Entertainment, such as concert tickets and Netflix subscriptions

• Pricey electronics, such as an oversized television or sound system

• Travel, vacations or hotel stays

• A new car, motorcycle or a bicycle

• Nightly takeout or delivery food

• A down payment or repairs on a home or car

• Small business expenses

• Other debt, such as personal loans, auto loans and credit cards

• Anyone else’s education costs

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What happens if you use loan money for nonessentials?

Generally, no one is tracking how you spend your student loan money. But, you could face consequences if your lender finds out you misused student loan funds. Depending on your lender’s policy, your current loan and any future loan options may be terminated, and you could immediately owe the full balance of what you already used. The bigger deterrent to wasting borrowed money is that you have to pay it back — with interest.

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Alternatives to using loans for living expenses

You can borrow to pay for living expenses, but that doesn’t mean you always should. You may be better off getting a part-time job while in school, tapping your savings or building up some cash by working during school breaks. This way you can pay for living expenses upfront without taking on more debt than you can afford.