Here’s How You Can Use Student Loans to Supplement Living Costs

Student loans are meant to cover rising tuition costs — in 2017, the average student loan debt was $37,172. But in some cases, you can use student loans for housing and living expenses. When paid off in a timely manner and used appropriately, personal loans for college students for living expenses can be a blessing rather than a burden.

College Ave

College Ave
Min. Loan Fixed APR Eligible Degrees
$1,000 3.49% - 12.99% Undergraduate & Graduate
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College Ave

College Ave
Min. Loan Fixed APR Eligible Degrees
$5,000 4.64% - 8.99% Undergraduate & Graduate
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Credible

Credible
Min. Loan Fixed APR Eligible Degrees
Varies 3.53% - 4.84% Undergraduate & Graduate
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Credible

Credible
Min. Loan Fixed APR Eligible Degrees
Varies 2.92% - 4.54% Undergraduate & Graduate
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Discover

Discover
Min. Loan Fixed APR Eligible Degrees
$5,000 4.24% – 12.39%¹ Undergraduate
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Education Loan Finance

Education Loan Finance
Min. Loan Fixed APR Eligible Degrees
$15,000 from 2.79% Undergraduate, Graduate & Parent Loans
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LendKey

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Min. Loan Fixed APR Eligible Degrees
$5,000 as low as 4.25% Undergraduate & Graduate
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LendKey

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Min. Loan Fixed APR Eligible Degrees
$5,000 as low as 2.99% Undergraduate & Graduate
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Sallie Mae

Sallie Mae
Min. Loan Fixed APR Eligible Degrees
$1,000 4.25% – 12.35%¹ Undergraduate
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Sofi

Sofi
Min. Loan Fixed APR Eligible Degrees
Varies 4.23% - 11.76% Undergraduate & Graduate
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SoFi

SoFi
Min. Loan Fixed APR Eligible Degrees
$5,000 2.99% - 6.28% Undergraduate & Graduate
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Splash

Splash
Min. Loan Fixed APR Eligible Degrees
$5,000 as low as 2.88% Undergraduate & Graduate
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Can you take out student loans for living costs?

Yes, it’s entirely possible to get a student loan for living costs. Generally speaking, student loans are intended to make sure you have the funds to get a higher education, so living expenses can be part of that. Your student loan package is decided by taking into account tuition, fees and basic living costs. This package may be based on living in the dorms and utilizing the meal plan, which is generally cheaper unless you can live at home or with a group of other students.

If you’re seeking a post-baccalaureate education, there are also graduate student loans for living expenses. Student loans for living expenses with bad credit are also an option if you don’t have a great financial history.

[Read: Best Student Loans in 2020]

While this isn’t a heavily regulated area, it’s best to use student loans for living expenses only if it’s something you genuinely need. Food? Yes. Dinners out five nights a week? No. New sneakers? Yes. Designer heels that you’ll wear once? No. If someone catches you misusing your money, they may report you to the U. S. Department of Education student loan fraud hotline.

What can you pay for with student loans?

Simply put, anything you absolutely need to attend school can be covered by your student loans. Student loans for housing and living expenses can include:

  • Tuition and fees
  • Books
  • Supplies required for course work
  • Personal computer for school
  • Housing (on-campus or off-campus)
  • Meal plans and groceries
  • Transportation (personal vehicle, public transportation, airfare to and from your home)
  • Study abroad programs
  • Professional exams and licensure expenses
  • Personal expenses

What can’t you pay for with student loans?

When using student loans for living expenses, make sure you’re not splurging on unnecessary items. That means it’s best to avoid using a personal loan for living expenses outside of the norm, such as:

  • Entertainment (movies, concerts, sporting events)
  • Vacations
  • Dining out excessively
  • Shopping
  • Electronics
  • A new car
  • Down payment on a home or remodeling costs
  • Paying off personal loans (car payment or mortgage)

Circumstances of using student loans for non-essentials

Sometimes the unexpected happens and you find yourself in a financial crunch. Perhaps a relative passes away and you need to fly back for the funeral, or maybe your car needs a new battery. Few would blame you for covering these costs with your student loan money. However, first see if you can get a personal loan or put the cost on your credit card. If you need to use the student loan money, pay yourself back as soon as possible to avoid ethical gray areas.

[Related: How to Avoid Capitalized Interest on Student Loans]

Tips on how to use student loans

You’re going to be paying interest on everything you buy with your student loan for a decade after you’ve spent the money. Keep these tips in mind:

  • Only use student loan money to cover college expenses. If it’s not related to your education or keeping you alive, don’t pay for it with your student loans.
  • Work while you’re in school. Studies find that students who work part-time get better grades. Plus, you earn money you can put towards buying clothes, a new phone or a vacation.
  • Live like a poor college student. Learn to live on a budget with cafeteria meal plans and second-hand books; your future self will thank you.

Tips on how to pay back student loans

  • Refinance or consolidate your student loans. This is an option for both public and private student loans if you have good credit, and it can help reduce your interest rate as well as your monthly payment amount.
  • See if you qualify for student loan forgiveness programs. Not everyone will qualify, but it’s worth looking into, especially if you are in the education or medical fields and are working in an underserved area.
  • Take on an extra job (or three). A surefire way to pay back your student loans is to earn more. Taking on jobs like babysitting on weekends, delivering pizza in the evenings and seasonal work will allow you to pay down your debt aggressively.
  • Check for discounts from your lender. Some student loan lenders will offer financial incentives for signing up for auto-draft payments, opting for digital statements and making on-time payments for a specific duration of time, often 36 months.

Student loan FAQs

What if my student loans are for more than my school expenses? 

In this case, the school will generally disperse them to you in accordance with their policies.

What if my student loans don’t cover all of my basic needs?

You may opt to get a private student loan or a student accommodation loan to cover extra educational expenses. For your personal needs, you should consider taking on a part-time job and getting a student credit card for emergencies and to build credit.

Should I pay my loans during the grace period?

Yes! During the grace period, usually six to nine months, you probably aren’t accumulating interest. For example, paying off $10,000 in debt during this time will be like earning an extra $500 if your lender charges 5% interest.

Too long, didn’t read?

Take out enough student loan debt to allow yourself to pay your tuition and living expenses. However, don’t use extra student loan money to live a lavish life; it’s better to get a part-time job to help with living expenses beyond the basics. Once you’re out of school, take advantage of programs that enable you to pay down your debt quickly or reduce the interest rate or balance so you can live debt-free sooner.

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We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.


Discover Student Loans Disclosure
1. Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.
2. Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and Auto Debit Reward. The interest rate ranges represent the lowest and highest interest rates offered on Discover student loans for Undergraduate Loans. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable margin percentage. For variable interest rate loans, the 3-Month LIBOR is 0.375%% as of July 1, 2020. Discover Student Loans may adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Our lowest APR is only available to customers with the best credit and other factors. Your APR will be determined after you apply. It will be based on your credit history, which repayment option you choose and other factors, including your cosigner’s credit history (if applicable). Learn more about Discover Student Loans interest rates.

Reviewed by

  • Adam Benjamin
    Adam Benjamin
    Editor

    Adam Benjamin is an editor for The Simple Dollar, Reviews.com, and Freshome. He covers everything from finance to internet providers and hopes to make it accessible for all readers.