Using Student Loans for Living Expenses


Using Student Loans for Living Expenses

Published May 26, 2019


Most people know that you can take out a loan to help pay for your tuition, but you may be wondering whether you can take out a student loan for living expenses.

The answer: Yes, you can!

Here’s how.

Calculating Living Expenses vs. Tuition

First, let’s take a look at what counts as a living expense. Paying for college involves tackling both direct costs and indirect costs. Tuition, dorm housing, and associated fees that go directly to your school count as direct costs.

Indirect costs are expenses associated with attending college, but not immediately related to tuition. For the purpose of student loans, “living expenses” includes a broad range of categories, including textbooks, housing costs (if you decide not to live in college-owned housing), school supplies, and funds for transportation.

Altogether, these direct costs and indirect costs add up to your total cost of attendance—the sum that you’ll refer to when figuring out how much you’ll need to borrow. However, be aware that any financial awards (merit or need-based aid) you’ve received will need to be subtracted from your cost of attendance before taking out a loan.

After you figure out your direct costs, and how much aid will apply to those, you’ll know how much you potentially have left over to use for your indirect costs. Just remember that you have to pay it all back, regardless of what you use it for.

How to Use Student Loans for Living Expenses

The amount you can borrow for a student loan depends on the cost of attendance for your school. While it may be easy to calculate direct costs, indirect costs are harder to determine.

Whether you’ve taken out private student loans or federal student loans, your school will deal with these funds directly, applying these loans to tuition, room and board, and other fees that your school charges.

If you have any excess money from the loan, you can use those funds toward your own living expenses. These funds may be particularly useful if you’re living off-campus.

If you receive financial aid, it’s a good idea to talk to your financial aid office to discuss the terms of your aid award. You may be eligible for a financial aid surplus—whatever’s leftover after tuition costs have been subtracted— and you can use that toward your living expenses as well.

What Can I Use My Student Loans for?

Now that we’ve covered direct and indirect costs, let’s look at what counts as a living expense.


You can account for groceries and the mandatory school meal plan. You may also consider appliances you need for storing and preparing food off-campus, such as a refrigerator.

School Supplies

Your textbooks and supplemental material fees such as field trip costs and lab fees fall under this category.


If you’re living off-campus, you can account for related expenses in calculating your living expenses. This includes rent, utilities, and food.


Especially at larger campuses, it may not be feasible to walk everywhere. Make sure to account for bus fees or that new bike you need for getting around campus quickly.

Calculating Indirect Costs

Expenses will vary depending on where your school is located. A private college in a major city will likely require you pay much higher living expenses than a college located in a rural area with a low population density.

Remember, groceries–and apartments–are much more expensive in Manhattan than they are in Nebraska.

Use an online tool that can tell you average costs for the region you’ll be moving to in order to get a solid idea of how much housing and food will cost while you’re away at college. Some key figures to look out for are:

  • Average studio apartment rent
  • Average price of milk, fresh produce, and meat
  • Average transportation costs

Keeping Borrowing to a Minimum

All that said, it’s best not to go crazy with your borrowing—remember, you’ll have to pay this money back (with interest)! Here are a few tips and tricks to keep living expenses, and the amount of money you’ll borrow to pay for them, low:

Don’t borrow money to fund “extra” expenses. If you can’t afford your daily $5 coffee or weekly date nights at the nicest restaurant in town without borrowing more money, they’re not worth it. A much better way to pay for these “fun” expenses is to find a job at school.

Do reduce, reuse, and recycle. It’s good for the environment, and it’s great for your wallet! If you find yourself needing dorm furnishings or a textbook for a popular course, see if someone you know is getting rid of their old items, especially graduating seniors. The best time to find great, gently-used items is at the end of the school year, when everyone is moving out.

Do plan ahead. The more thoroughly you research your potential living expenses, the more precise you’ll be when it comes to borrowing a student loan—and the less likely you’ll be to over-borrow, and be forced to pay back more money (plus interest) later on.

Student loans are serious business. While on the surface they may seem like a fast way to get money, and they can be very useful if you need some extra funds for living expenses, be aware that you will need to pay them back.

Carefully calculate how much you’ll need to spend on direct and indirect costs for your college education, and plan accordingly.





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