What Can a Student Loan Be Used For?

What Can a Student Loan Be Used For?

As opposed to the widely held belief, student loans are not only limited to covering your tuition fee.

In fact, you can use them to cover any other educational expenses you incur during the academic year or program the loan is cleared for. The reason it’s important to know what you can use a student loan for is that most students only think of it as a way to pay for their tuition.

However, tuition makes up only one part of the total bill. The rest of the expenses cover transportation, books, school supplies, accommodation, and much more.

However, before we get into what a student loan can and can’t be used to pay for, here’s what you should know about the types of loans available for students.

Federal vs private loans

Generally, there are two types of loans, federal and private. It is generally recommended to go for federal loans, especially if you wish to pursue higher education. Private student loans tend to have high interest rates and very limited options for repayment, whereas federal loans have low interest rates and a variety of options for repayment.

However, the reason some people prefer private over federal loans is that there’s a limit on how much you can borrow with the latter. Due to the aggregate limit, the amount may not be sufficient to pay for the entire attendance cost.

What can you use a student loan for?

As a student loan borrower, there are several things you can use the funds for. Whether you opt for a private or federal loan, there are many certified expenses you can use the money for. Here are some of them.

Books and school supplies

Books and other related supplies make up a huge chunk of what students typically pay for in a single academic year. Some of these supplies include book bags, pens, notebooks, scientific calculators, measurement tools, and much more. Some texts books can be especially very expensive, costing a student almost a thousand dollars each.


Tuition often accounts for the biggest expense of a student’s academic year. It’s the standard cost that consists of enrollment and attendance of classes.

Accommodation expenses

Your living expenses typically consist of your room (whether it’s on or off campus), meals (whether it’s on or off campus), groceries and anything else you purchase for the purpose of living.

Additional institutional fee

If your program consists of institutional fees such as lab charges, your student loan is also meant to pay it off. Sometimes, expenses as little as parking fees can also be covered with your student loan.

Expenses of dependent care

Some student loans can also be used to pay for childcare expenses, given that you have a child and are also pursuing education.


After tuition and accommodation, transportation takes a major chunk of your expenses. Generally, transportation cost can range from $1000 to $1250 per year, depending on the type of university (private or public) you go to. Additionally, you can also use the loan to pay for train or bus passes or gas and car if you have a personal vehicle.

Personal items

Items related to everyday use, such as appliances for the dorm, also come under student loan coverage.

Educational equipment

If there’s any equipment necessary to study, such as a laptop, camera or mandatory software, you can use the loan to pay for it.

Apart from the expenses mentioned above, you may incur costs such as insurance mandated by the school or study abroad expenses. All in all, anything and everything that falls under your educational or living costs are payable using the student loan.

What can you not use your student loan for?

Given that you’ve already spent a certain amount on accommodation, tuition and all the necessary supplies, you may have some percentage of the loan left at the end. However, don’t make the mistake of spending it on the following.

Dining out

Even though you can use a student loan to pay for regular meals, don’t spend it on takeout food whenever you like. The reason it isn’t a good idea is that the loan terms do not permit it. If you’re found violating any of the terms, the loan may be taken away from you.


Taking a break for a while is something every student desires. While going on a vacation now and then is encouraged, it’s not recommended to use your student loan money for it. Any discrepancies, in the end, may put you in a tough spot.


Whether it’s a Spotify subscription or tickets to a game, your student loan isn’t meant to pay for any leisure activities you wish to partake in.

Club memberships

Getting a gym membership when you already have facilities within the campus is not a great idea. Hence, never use your loan for services you can easily avail inside your educational facility.


In a nutshell, using your student loan for anything unrelated to your educational and daily living expenses is not permitted. When you take a loan out, you’re required to sign an agreement that clearly states the terms and conditions. In case you’re caught doing anything against the agreement, you may have to face some serious consequences.

However, even if you end up using the loan for expenses it was never meant to cater to, without being caught, it won’t play out well in the long run. This is because, at some point, you will start paying the loan off.

Moreover, different limits apply to different types of loans. Since federal loans are restrictive, you may have to look for a private lender for extra expenses.

Regardless, using more money than required can put you in a tough spot once you start paying the loan off. To save yourself from additional interest payments, you may have to work out a repayment plan as soon as your loan is approved. In conclusion, it’s always a good idea to save the student loan for essential expenses and pick up a part-time job for any expenses unrelated to your education. It’s also imperative that you read the terms of your student loans to make sure your expenses fall within th categories it will cover.