Can I Take Out a Student Loan for Living Expenses?

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It’s obvious that you can borrow student loan money to cover the cost of tuition, but you may be wondering if you can also use some of that money to pay for living expenses.  Good news: The answer is yes.


Cost of Attendance

Every school has a defined cost of attendance, which includes not only tuition and student activity fees, but also several other categories of expenses:

  • Housing: the cost of room and board (if you live on campus) or an allowance for rent payments and food if you reside off campus;

  • Textbooks and supplies: the cost of books and necessary supplies such as a computer;

  • Transportation: the cost of commuting to school every day, or flying home for the holidays if you attend school far away;

  • Loan fees: upfront fees (if any) assessed by the lender at the time of loan disbursement;

  • Dependent care: for students with children, the cost of providing day care for dependents; and

  • Study-abroad programs: costs associated with eligible study-abroad programs.

[How much should I budget for college? Read our guide here.]


How Student Loans are Disbursed

Student loan money is typically paid by the lender directly to your school.  The school keeps only enough money to cover the cost of tuition, and disburses the remainder directly to you.  The amount you receive is known as your student loan refund.  Your lender expects that you will spend this refund on education-related expenses, which may fall into any of the categories described above.


What Not to Do

Do not borrow more money than you actually need.  Before applying for any student loans, prepare an estimated budget to determine the scope and scale of your likely expenses.  If you are receiving financial support from family members, use that opportunity to borrow less. If you unexpectedly find yourself with extra loan money remaining at the end of the semester, consider repaying it immediately, or paying off other high-interest debt that you may have.  Whatever you do, remember: Every dollar that you borrow must be paid back eventually - with interest!

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