What can you use student loans for? (2024)

FAQs

Can you use your student loan for anything? ›

No, student loans aren't a free-for-all spending spree. The U.S. Department of Education and almost all private student lenders list acceptable purchases and expenses, typically tuition, room and board, books and supplies, study abroad expenses, transportation and child care costs.

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.

While you can use student loans for living expenses, it's wise to limit your spending to minimize your student loan debt. Sticking to a budget while you're in school will make repaying your debt easier after graduation and help you achieve your goals.

Along with school meals, groceries, rent, housing supplies, and utilities, you can also use your loans to buy books, a laptop, and anything else that will make a difference in getting that perfect GPA. The first step is filling out a FAFSA.

In most cases, your child's school will give you your loan money by crediting it to your child's school account to pay tuition, fees, room, board, and other authorized charges. If there is money left over, the school will pay it to you.

It's better to make sure you aren't breaching any loan terms; using a loan for prohibited purposes could result in the lender forcing you to repay the full amount plus interest immediately.

Anything pertaining to your schooling is an appropriate use of financial aid. School supplies, a computer, travel costs to and from campus, books, tuition, childcare expenses (if applicable), and tutoring are all reasonable purchases for a serious student.

You might need to buy a new outfit for an internship interview, but you shouldn't use student loan money to fund a new wardrobe and buy expensive clothes. Remember, every dollar you borrow will cost about two dollars by the time you repay the debt.

Can I Use Student Loans as My Proof of Income? For full time students applying with a qualified co-signer, student loans can often suffice as proof of income on the rental application.

Can you return a student loan if you don't use it? ›

Some schools will handle it for you, but they aren't required to do so. If the college won't handle it, contact your loan servicer to find out how to return unused student loans. No interest charges should accrue, and the lender will waive any fees on the returned amount.

Typically, student loans do not get deposited in your bank account. Instead, the loans are disbursed directly to the school where it is applied to tuition payments and room and board.

What personal sacrifices will you have to make in order to ensure that those bills are paid? If you're borrowing some of the cash from your retirement funds, how easy will it be to replace that money later? It's extremely important to thoroughly think through opting to pay out of pocket, instead of with student loans.