What can student loans be used for?

Use your student loans for these items

Whether you’ve got federal or private student loans (or a combination of both), here are education expenses that you can use your extra loan money for:

• Tuition: This is the cost of attending your classes in college; your school will automatically deduct it from your loan.
• Books, supplies, and fees: These include any lab fees, required books, and other supplies (notebooks, pens, etc.) that you need for school.
• On-campus room and board: These include your dorm expenses and any meal plan you purchase; the school will automatically deduct these from your loan if you’ve signed up for them.
• Off-campus housing: If you live off-campus, eligible expenses can include rent, utilities, and groceries.
• Transportation: Expenses include gas for getting to school, parking fees, bus passes, etc.
• Study abroad: If you’re spending a semester or year abroad for school, you can use your loan to pay for those costs.
• Technology and equipment: If you need a laptop, software, or any other equipment for your classes, you can use money from your loan.
• Personal costs: These can include sheets and towels, toiletries, or even a microwave and refrigerator.
• Professional expenses: You can use your loan funds for professional testing, licenses, and certification.
• Disability needs: Extra money can go towards paying for specialty services, equipment, and supplies that you need.
• Childcare: If you’re a single or working parent, you may be able to use your loan to pay for childcare while you’re in classes; check with your financial aid officer to make sure.

Things you shouldn’t use student loan money for

Don’t use your loan money on expenses that aren’t essential for school like these:

• Eating out: Don’t use your loan for take-out pizza and beer for your roomies or taking your family out to dinner.
• Vacations:  Spring break travel might feel like a must-do, but it’s not necessary for your education.
• Debt: Don’t use your loan to pay off credit cards, a car note, or other debt. You also can’t use it to pay for a down payment on a new house or condo.
• Non-school services: You can’t use your loan for hiring cleaners, paying gym fees, or any other non-education services.
• Entertainment: Don’t use your loan for streaming services, sporting events, concerts, theater, etc.
• Clothing and shopping: Buying new clothes or tech for fun doesn’t qualify as a school expense.

What happens to extra student loan money?

After your student loan has been disbursed (sent) to your school and they’ve taken out what they need for tuition, room and board, meal plans, and other fees, there might be some money left over. If there is, you’ll get the remainder of your loan amount as a check or debit card. You may be tempted to spend it all in one place, but don’t forget that it’s student loan money, not necessarily extra cash. You borrowed that money and you’ll have to pay it back with interest when your loan is due.

One thing you can do with extra student loan money is send the leftover funds back to your student loan servicer as a loan payment. That way, you can reduce your Total Loan Cost and graduate with less student loan debt.

Otherwise, you can use your leftover student loan money for any eligible school expenses. If you have questions about whether an expense is allowed for your federal or private student loans, check with your school’s financial aid officer for guidance.