You can use federal student loans to cover tuition and other expenses for on-campus and off-campus students. But you can also use them to cover other essential living expenses such as books, transportation, etc.
This guide will show you how to use your student loans for living expenses. Let’s begin.
Can You Use Your Student Loans For Living Expenses?
If you stay on campus, you can use your student loans to cover the room and board costs. And it doesn’t matter if it’s an on-campus apartment or dorm room. You can also use the loans to pay for the following living expenses:
- Housing utilities and supplies
- Means and groceries
- Some home furnishings
Can You Use Your Student Loans For Non-Essentials?
Your loan lender and student aid office don’t regulate every item you use your student loans for. But you may face the consequences if they find out that you’ve used your loans for unnecessary purchases.
The following are non-essentials you should stay clear off:
- Unrelated electronics
- A new car
- Business expenses
- Someone else’s tuition
- Dining out frequently and expensive meals
- Other debt
If you misuse your loan funds, your lender could end your current loans. Your future loans could also be denied, including requesting that your balance be paid in full. Keep in mind that when you have to pay back your loan balance, you must pay the principal plus interest.
Student Loans Alternatives
Student loans are probably the most popular way to fund your education-related expenses. But there are other alternatives available. So before you settle on student loans, consider other options, particularly those that offer you free money.
Let’s go through some of them.
- Grants. The government, private companies, and colleges offer grants. They give you the grant based on your financial need, and you don’t have to repay them.
- Scholarships. Scholarships are almost like grants, but they are usually merit-based. Some also offer you a scholarship if you belong to specific companies or have unusual interests.
- Part-time work. If it’s possible, you can find part-time or summer jobs while you’re in school. That can help you clear off some costs of education. In addition, some schools offer work-study programs or advertise job opportunities that are flexible enough with your class schedules.
If you must take out a student loan, you can opt for loan forgiveness like Public Service Loan Forgiveness to help you pay off your debt.
Tips For Saving Money On Your Living Expenses
The student loans you get are based on your school’s cost of attendance. And this can vary depending on where you go to school. So even though there are a few rules on using student loans, the essential thing is to know how to spend your funds.
One good way is to opt for student loan forgiveness. That way, you can pay off your student loans faster. In addition, if you want to save money on your living expenses, consider the following tips:
- Cover urgent needs first. You should focus on your tuition, fees, and huge expenses such as living arrangements. That means your student loans should cover most of these expenses.
- Look for cost-effective alternatives. If you must buy something for school, you don’t have to buy the most expensive option. When you have to buy supplies, find out if you can buy a cheaper or older version. Better yet, find a secondhand and look for renting and borrowing options. You can even split the cost with your friends in the same class.
- Analyze your housing options. Sometimes, you may be required to stay on campus for the first year. But after that, it may be better to rent an off-campus apartment. Also, if you choose an off-campus apartment without an expensive meal, you can save money.
- Spend the amount you only need. Even if you get a considerable loan amount, you don’t have to spend all your loans. Remember, any loan you spend, you’ll have to pay back with interest.
Even though you can use student loans for your living expenses, you need to be smart on how you use them. You can cover lots of things with your student loans, but not everything. So don’t spend your funds on things you don’t need.
Furthermore, remember that you’ll have to pay back anything you borrow plus interest. Finally, find other repayment or loan forgiveness plans to pay off your student loans.
If you don’t know what to do, you can always contact a student loan expert. They can help you make the right decision.