Can you use student loans to cover living expenses? – Fox business | Vette Leader

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Learn how you can use your student loans to pay for education-related living expenses like off-campus transportation and housing. (Shutterstock)

student loans are not just for classroom use or textbooks. You can also use them to cover other college-related expenses — things like food, lodging, and other general living expenses.

While lenders don’t make special student loans for living expenses, traditional student loans can help cover college costs without tuition fees. Here’s what you should know about using student loans to fund education-related living expenses.

If the federal student loan is not enough to cover all costs, you can consider a private student loan. It’s easy with Credible Compare interest rates on private student loans from multiple lenders.

How to use student loans for living expenses

You should always seek grants and scholarships first before turning to student loans. Federal student loans issued by the US Department of Education should be your first choice for borrowing. These loans offer lower interest rates, flexible repayment options, do not require a co-signerand are not based on credit history or score.

To apply for federal student loans, as well as federal scholarships and work-study programs, you must complete the Free Federal Student Assistance Application (FAFSA) and provide your tax returns, W-2s, and other financial documents. If your parents list you as a dependent on their tax return, you must also provide their information.

Once the Department of Education has processed your application, they will send you a letter detailing your expected family contribution, which you can use to determine if you are eligible for federal financial assistance. Next you will receive a letter from your school with details of the type and amount of federal aid You qualify for. If you need more than you’re promised, private student loans — made by private lenders — can fill the gaps. Just keep in mind that you may need a co-signer to qualify for these as eligibility is based on credit history.

With both government and private student loans, the lender disburses the funds directly to your school to pay for tuition, room, board, and other approved fees. If there are any funds left after payment, your school can pay you the excess amount directly.

You can use this extra money to pay for your living expenses as long as those expenses are related to your education.


What expenses can you pay for with student loans?

The Federal Student Aid Office says student loan funds can be used for “approved educational expenses” — and only those incurred while attending the school at which you were deemed eligible.

Approved educational expenses can, of course, include tuition and room and board (accommodation on or off campus). But it can also include:

  • books and other accessories
  • Equipment, like a camera, for your photography class
  • Costs for caring for relatives if your child has to attend a day care center during your classes
  • transport and travel costs
  • desktop computers or laptops
  • Costs for studying abroad or dual studies
  • License or Certification Costs
  • disability costs

Because food is an approved expense, you can also use your student loan for food—but only within reasonable limits. For example, a $100 dinner at a steakhouse would not qualify, but lunch at the campus cafeteria would.

If you need a personal student loan because your state aid isn’t covering all of your costs, you can easily do that Compare interest rates on private student loans from multiple lenders with Credible.

What expenses cannot be paid for with student loans?

You shouldn’t use student loans for anything unrelated to your education. Misuse of your loans can lead to legal problems, or you may even have to pay the money back if your lender finds out (more on that later).

Although there is no official list of what student loans cannot be used for, in general you can assume that your lender will consider the following expenses off-limits:

  • Private Travel — It would be fine to use your credit to cover a train pass to get to and from class, but buying spring break plane tickets for you and your roommate almost certainly wouldn’t.
  • entertainment You generally couldn’t use your credit to pay for concert tickets or a night at the bowling alley. An exception might be if it would be required for a class or school event – for example, if you were reviewing a concert for your school radio station or taking part in a field trip for a biology class.
  • Personal hygiene – Memberships in gyms, hair salons, pedicures, and other similar services are not eligible for use of student loans. These would have to come out of your own pocket.
  • Other Debts — It’s a great idea to use your leftover funds to start paying off your student loan. But you generally can’t use them to pay off your credit card, car loan, or other debt.

If you are ever unsure whether an expense is eligible or not, contact your student loan servicer or your school’s financial aid department. They can tell you with certainty what is eligible for credit coverage and what is not.


What Happens When You Use Student Loans for Non-Educational Expenses?

When you take out a student loan, you must sign a promissory note — essentially a contract that outlines the terms of your agreement. Using your borrowing funds for unauthorized expenditure would breach these terms and your lender may act accordingly.

For example, with government student loans, if the Department of Education found out about your misuse of funds, you would have to pay back the full amount of your loan immediately. For personal student loans, the implications depend on your lender, but you could face legal action.

Alternatives to student loans for living expenses

Student loans aren’t your only option when you need help with living expenses. Before turning to credit, consider one of the following alternatives.


Scholarships can be a great way to help offset some of the cost of college without going into further debt. Schools, government agencies, non-profit organizations, and private companies all offer scholarships.

Your college’s tax office is a good place to start when looking for scholarships, or if you’re still in high school your college advisor can help. You can also use those of the Ministry of Labour Scholarship search tool.

work study

You can also apply for student jobs, which are on- and off-campus jobs designed to help – at least partially – cover your education costs.

Government dual degree programs are one type of government aid that may be available to you. Your school may have other options as well. Sometimes colleges work with local companies to create work study programs only for specific fields of study. Again, your tax office is a good place to start looking.

part-time job

You can also apply for part-time jobs at restaurants, shops, and businesses near your school. Just make sure the hours match your schedule and that you still have time to study. You also need to make sure you have the right mode of transportation to get to and from your place of work, or find something within walking distance.

reduce costs

Minimizing your expenses is key when you’re struggling to cover general living expenses. Try to find areas where you can reduce spending to help. This may mean borrowing your textbooks instead of buying them, going without music or TV subscription services for a while, or taking the bus instead of gas.

Only borrow what you need

Student loans can help you pay for school-related expenses, but they’re still a debt — and they are come with interest. To ensure that you minimize these additional costs, it is important that you only rent what you really need.

If you end up with money left over that you can’t or don’t need to use, then consider using it to make an additional payment on your loan. This will reduce your principal balance and interest costs over time. It could also help you pay off your student loans sooner.

When you decide a personal student loan is right for you, Credible makes it easy for you Compare options from multiple lenders. It is 100% free to use and will not affect your balance.

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