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

Student loans — both federal and private — can be used to cover more than just your tuition. They can also cover living expenses, such as housing, groceries, toiletries, and more.

These expenses are factored into your school’s cost of attendance (COA), which is used by lenders to determine how much money you should receive.

Below, we’ll explain when a student loan can be used for living expenses, which lenders offer these loans, how the process works, and more.

On this page:

• When student loans can be used for living expenses
• Student loans for living expenses
• How to use student loans for off-campus housing
• Living off student loans: dos and don’ts
• Repercussions for misusing student loan funds

Prefer video? Check out our video on using student loans for living expenses:

When student loans can be used for living expenses

When you take out a student loan, the funds are first sent directly to your school and applied towards tuition, fees, and room and board if you live on campus.

Any funds that remain, are sent to you directly in one lump sum to use as needed.

Here is a list of some 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 (parking pass, gas, public transit, etc.)
• Food (groceries, meal plans, etc.)
• Personal supplies (toiletries, medication, etc.)
• Housing supplies (sheets, towels, microwave, etc.)

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

Student loans that can be used for living expenses

First, you should consider your federal student loan options. If you’ve done that, then consider the private lenders below that offer student loans that can cover living expenses. Make sure to only borrow what you need to limit the amount you need to repay after graduation.

College Ave

View Rates

Fixed Rates

4.39% – 11.98%

Variable Rates

1.79% – 10.97%

Loan Amounts

$1,000 – 100% of school-certified cost of attendance

College Ave is our top-rated private student loan partner. The company offers loans for undergraduates, graduates, career training, and parents.

According to the lender, money from your loan can be used for tuition, room and board, housing, textbooks, supplies, transportation, and more.

Some benefits of College Ave include low rates, the ability to choose your loan terms, and no fees to apply.

Sallie Mae

View Rates

Fixed Rates

4.25% – 12.59%

Variable Rates

1.13% – 11.23%

Loan Amounts

$1,000 – 100% of the school-certified cost of attendance

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

According to the lender, its loans can be used for tuition, room and board, off-campus housing, transportation, sheets and towels, and more.

Some benefits of Sallie Mae include multi-year advantage (high approval odds for existing undergraduate borrowers with a cosigner) and the quickest opportunity for cosigner release.

Earnest

View Rates

Fixed Rates

4.39% – 12.78%

Variable Rates

2.74% – 11.44%

Loan Amounts

$1,000 – 100% of school-certified cost of attendance

Earnest is an online lender offering student loans for undergraduates and graduates.

According to the lender, its loans can be used for tuition, room and board, linens, kitchen supplies, transportation, dependant care, and more.

Some benefits of Earnest include no fees, a quick two-minute eligibility check, and the ability to skip one payment per year.

Discover

View Rates

Fixed Rates

3.99% – 11.59%

Variable Rates

1.29% – 10.59%

Loan Amounts

$1,000 – 100% of school-certified costs

Discover offers student loans for undergraduates, graduates, and parents.

According to the bank, loan money can be used for tuition, fees, room and board, books and supplies, transportation, and personal expenses.

Some benefits of Discover include a reward for good grades, an automatic payment rate discount, and no origination fee.

How to use student loans for off-campus housing

It’s actually really easy to use student loan money for housing and other living expenses. Just be sure to spend the money on only the things that are absolutely necessary.

Here’s how you do it:

1. Deposit Student Loan Refund Check: Once you receive 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: Simply write a check or make payments however you typically would from your bank account for rent as if it were your own money.
3. Monitor Account Balance: It’s important to 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 will have enough funds to afford the rent for the whole semester.
4. Avoid Unnecessary Spending: Unfortunately, some students use student loan money for unnecessary expenses (like spring break). Be sure to reserve your student loan money on only those expenses that are absolutely necessary. Remember: you will have to repay all of the money, with interest.

Good money management practices can make your student loan funds stretch 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

You should be aware that federal student loan funds do not typically process until about four weeks after school starts. In order 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 your loan money comes in.

Private student loans are offered by banks, credit unions, and online lenders and 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 directly to you to pay the expenses you need.

Living off student loans: dos and don’ts

Student loans may seem like free money, but the debt you take on can follow you for years to come. If you run out of student aid too soon, you could find yourself 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 make sure your loan money doesn’t run out and force you into this bad 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. Here are some things it’s good 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

Some of the things you shouldn’t use your loan funds to cover are:

• Spring break trips
• Nights out at bars
• An expensive apartment
• Designer clothing
• Expensive electronics
• Restaurants or takeout
• Treating your friends
• Buying a car you don’t absolutely need to get to class (or buying 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 very unlikely lenders will look into what you’re using the funds for or take any action if they find out you’re having some fun with your student aid money. Their main concern is your ability to repay the loan.

Bottom line

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

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

If you need a private student loan to fund your education and living expenses, College Ave is our top-rated partner lender.

View Rates

Fixed Rates

4.39% – 11.98%

Variable Rates

1.79% – 10.97%

Loan Amounts

$1,000 – 100% of school-certified cost of attendance