Can You Take Out Student Loans for Living Expenses & Housing?

Short answer: Yes, you can.

You can use student loans—federal and private—for more than just your tuition. They can also cover living expenses like housing, groceries, toiletries, and more. These expenses are part of your school’s cost of attendance (COA), which lenders use to determine how much money you should receive.

Below, we’ll review lenders that cover these expenses and explain when you can use a student loan for living expenses.

Student loans you can use for living expenses

If you’ve already considered your federal student loan options, you can consider private student loans. The lenders below cover housing and other living expenses.

We’ve included a list of expenses each lender covers in our reviews.

College Ave

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• Borrow up to 100% of your cost of attendance, including on-campus and off-campus expenses
• You choose your repayment terms
• Receive a decision in just 3 minutes

College Ave is our top-rated private student loan lender. Its loans can be used by undergraduates, graduates, and parents to cover housing costs and other living expenses, such as rent, books, transportation, groceries, and more.

College Ave notes that your school will set your cost of attendance, which is what it uses to determine the total funding you receive. The money is first sent to your school to be applied toward your bill, with excess funds being delivered to the primary borrower for additional expenses.

You can choose your repayment term and decide whether to make payments while enrolled or defer payments until after graduation. Interest rates range from 4.07% to 16.69% APR and can be reduced by 0.25% if you enroll in automatic payments.

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Sallie Mae

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• Borrow up to 100% of your certified costs
• Funds available for online and summer classes
• Apply once for the whole year

Sallie Mae is the industry’s most well-known private lender, offering student loans for undergraduates, graduates, career training, and parents.

Your loan can be used for tuition, room and board, off-campus housing, transportation, sheets and towels, meals, books, and more. You can cover an entire year’s worth of housing and living expenses with one application rather than applying multiple times.

Future disbursements can be canceled without penalty if your education plans change. Its loans have interest rates between 4.50% and 16.70% APR with repayment terms between 10 and 15 years.

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Credible

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• Compare multiple prequalified offers
• No costs or impact on your credit score

Credible is an online marketplace that lets you compare prequalified offers from its partner lenders. This makes it an excellent choice for undergraduate and graduate students looking for the best terms.

The terms of your loan will depend on the lender you choose, but nearly all private lenders cover living expenses, so you shouldn’t have any issues finding the money you need.

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Earnest

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• Covers 100% of your college expenses
• No origination, application, or late fees
• 2-minute eligibility check without impacting your credit score

Earnest is an online lender offering student loans for undergraduates and graduates. It offers several unique benefits, such as no fees on any of its loans, a 9-month grace period, and the ability to skip one payment per year.

Earnest loans can cover tuition, room and board, books, laptops, study abroad, kitchen supplies, transportation, dependent care, and more.

Its loans have competitive rates ranging from 4.11% to 16.20% APR that can be repaid over 5, 7, 10, 12, or 15 years. There are no penalities for paying off your loan early.

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When you can use student loans for living expenses

When you take out a student loan, the lender sends the funds to your school, which applies the amount to tuition, fees, and room and board if you live on campus.

The school sends any remaining funds to you directly in a lump sum to use as needed.

Here is a list of living expenses that can be covered by student loans, according to the lenders in the next section:

• Room and board
• Off-campus housing
• Utilities
• Transportation (e.g., parking pass, gas, and public transit)
• Food (e.g., groceries and meal plans)
• Personal supplies (e.g., toiletries and medication)
• Housing supplies (e.g., sheets, towels, and a microwave)

For a more in-depth list, check out our guide on what student loans can be used for.

How to use student loans for off-campus housing

It’s easy to use student loan money for housing and other living expenses. Just be sure to spend the money on necessary expenses.

Here’s how you do it:

1. Deposit student loan refund check: Once you get the student loan refund check from your school, you can deposit the money into your bank account just like any other check.
2. Pay rent or other housing expenses: Write a check or make payments however you typically would from your bank account for rent.
3. Monitor account balance: Remember you won’t get any more student loan funds until the next semester or year, so you should monitor your account balance to ensure you’ll have enough for the rent for the whole semester.
4. Avoid unnecessary spending: Some students use student loan money for unnecessary expenses (such as spring break). Be sure to reserve your student loan money for necessary expenses. Remember: You will have to repay the money with interest.

Responsible money management can stretch your student loan funds further so you can borrow smaller amounts or use some of what you borrowed to make optional loan interest payments while in school.

Federal student loans vs. private student loans for housing expenses

Federal student loan funds don’t process until about four weeks after school starts. So to be settled and ready for the first day of class, you may need the first month’s rent and any necessary security deposits before you get your loan money.

Private student loans from banks, credit unions, and online lenders are handled differently than their federal counterparts. Because approval for a private loan is based upon creditworthiness instead of financial need, the money is often disbursed to you to pay expenses.

Living off student loans: Do’s and don’ts

Student loans may seem like free money, but the debt can follow you for years. If you run out of student aid too soon, you could be forced to rely on credit cards or personal loans to pay the bills—which could put you even further in debt.

Since most college and graduate students have little or no time to work and earn money while in school, it’s even more important to be responsible with your spending to ensure your loan money doesn’t run out and force you into a challenging financial situation.

The key to keeping your borrowing costs at a minimum is to know what you should and shouldn’t spend your student loan money on. Below are appropriate items to pay for with student loans:

• Tuition costs and fees
• School activities that enhance your resume or deepen your learning
• Study abroad programs that give you exposure to different cultures and the chance to learn new things while living in a foreign country
• Books and other supplies you need for classes
• Essential living expenses, including reasonable rent, food, toiletries, and personal items
• Tutoring or training you need to excel in your college career
• Professional testing, certificates, or licensing
• A computer you need to perform schoolwork

You shouldn’t use your loan funds to cover:

• Spring break trips
• Nights out at bars
• An expensive apartment
• Designer clothing
• Expensive electronics
• Restaurants or takeout
• Treating your friends
• A car you don’t need to get to class (or a vehicle that’s too expensive)

Can I get in trouble for misusing student loan funds?

Your student loans are supposed to be used for educational expenditures and essential living expenses. If your student loan lender finds out you’re misusing funds, such as by paying for spring break trips or bar-hopping, it’s possible your loan could be terminated and you could be forced to pay back the full amount borrowed.

However, it’s unlikely lenders will look into what you’re using the funds for or take action if they find out you’re having fun with your student aid money. Their main concern is your ability to repay the loan.

You want to borrow the minimum amount of money you need to attend school and have a reasonable standard of living, but avoid taking out too many student loans.

Student loans for living expenses are available, but using them wisely is important, so you don’t run out of money and need to take on other consumer debt during the academic year.

FAQ

Which living expenses are most often paid for with student loans?

Student loans can cover essential living expenses, including accommodation, meals, transportation, utilities, books, and personal and housing supplies. If you have a child, you may also use student loans to cover child care expenses.

Do you have to tell the lender if you change housing?

You should update your contact information, including your mailing address, with your lender. This ensures you receive essential communications and correspondence related to your loan.

If you’re on an income-driven repayment plan, keeping your address updated is crucial. Some plans need you to recertify your income and family size annually, and having the right contact information ensures you get the necessary reminders and documents for this process.

Can you take out more funds if your living expenses increase?

You can take out additional student loan funds if your living expenses increase during your academic program. However, there are limits to how much you can borrow each year. Approach taking on more debt with caution. It will increase your overall loan burden and future repayment obligations.