Student Loans for Housing – It is no longer news that college is expensive. Tuition costs continue to increase exponentially every year. But after tuition, the second most expensive thing is housing. Due to the expensive nature of education cost, students now apply for student loans to help pay for college.
But this is not all you can use your student loans for, read further to find out everything you need to know about using your student loan funds.
Can You Take Out Student Loans for Housing Expenses?
The answer is yes. The U.S. Department of Education allows you to use your student loans for housing and living expenses while you are in school. That is because having those expenses covered lets you spend more time studying and increases your chances of getting a degree.
What Can You Use Student Loans for?
- Room and board
- Housing utilities
- Housing supplies and furnishings
- Meals and groceries
- A personal computer you’ll use for school
- Transportation costs
- Dependent childcare expenses
- Miscellaneous personal expenses
What Shouldn’t You Use Student Loans for?
- Vacations and travel
- A new vehicle
- Down payment on a house
- Dining out often or expensive meals
- A new wardrobe
- Small business expenses
- Your other debt
- On anyone else (like to pay for a friend’s tuition)
What Personal Circumstances Can Affect Student Loans?
Depending on your personal circumstances, your financial aid administrator might increase your cost of attendance to include other expenses like childcare costs or the cost of operating and maintaining a vehicle you use to get to and from school but not the cost to buy a vehicle.
If you’re disabled, your cost of attendance might include expenses for special services you need, like personal assistance, transportation, equipment, and supplies.
When it comes to spending student loans on housing and food, your cost of university attendance will depend on whether you’re living at home with your parents, in campus housing, or in an off-campus apartment or house. If you’re living off campus, the school will estimate “reasonable expenses” for your room and board.
What happens if you use student loans for something you shouldn’t?
The government of your financial aid office won’t tell what kind of place you can rent but if you spend more money on housing and food than budgeted in your school’s official cost of attendance, you might be short of funds needed to pay for other expenses.
Have it in mind that, if tipped off, the government will investigate and prosecute those who commit fraud or abuse student loan funds.
What other ways can you pay for housing?
If you want to avoid debt completely, you can turn to other ways to fund your off-campus living situation. You could get a part-time job or check into federal work-study programs that allow you to make money while working for the school you’re attending.
One of the most critical parts of living off-campus is to save as much money as you can. Pass up the trendy digs with a great view in favor of a smaller, less expensive apartment. Rather than eating out, get some groceries and cook low-cost meals. Forgo the daily latte and use your coffee pot. Get some roommates to share the cost.
In conclusion, while you might think of both federal student aid and private student loans as easy money, taking out more for housing expenses or other education unrelated expenses is not the answer unless you really can’t get by without them.
Many borrowers are still paying off their student loans in their 40s and 50s. So be smart when using your student loans to pay for certain expenses.
Stick to a budget while you’re in school, take on a part-time job, and don’t take out more in federal or private loans than you need. Just remember that you’ll have to pay back your loans with interest.
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