Using Student Loans for Living Expenses and Housing

By Jody McMaster · March 02, 2023 · 6 minute read

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Using Student Loans for Living Expenses and Housing

Student loans can be used to cover more than tuition and fees. They can pay for lodging, food, commuting, a computer, and study abroad (but not spring break!).

Most qualified education loans can be used to cover the entire cost of attendance — an estimate of total costs for an academic year at a college, as determined by each campus financial aid office — minus any aid you receive.

Let’s take a closer look at what student loans can cover, what they should not, and alternative ways to pay for living expenses.

Books, Yes. New Car, No.

As long as a student is enrolled at least half-time, student loans can cover a range of expenses at a qualified institution of higher education or at a hospital or health care facility that provides postgraduate internship and residency training programs.

What Student Loans Can Cover

•   Tuition and mandatory fees. You can even use private student loans to pay off past-due tuition balances.

•   Room and board. Whether it’s a dorm or an apartment off-campus, the expense can be covered. Board means a campus meal plan or groceries.

•   Transportation. Loan money can pay for maintaining, insuring, and fueling your car or for public transportation fares.

•   Personal expenses. These include cell phone bills, laundry costs, bed linens, towels, a microwave oven, and anything else you normally spend money on.

•   Books and supplies. New, used, or rented textbooks are covered, as are supplies ranging from software to notebooks.

•   A personal computer. You can buy or rent a computer with student loan money.

•   Dependent care. Child care expenses are covered.

•   Loan fees. This includes any origination fee.

•   Study-abroad costs. The Federal Student Aid office lists international schools that participate in the federal student loan program and describes the process.

Other qualified expenses may include utilities and furnishings.

What Student Loans Should Not Cover

•   Travel or vacations

•   Purchase of a car

•   Down payment on a house

•   Entertainment

•   Frequent dining out or expensive meals

•   New wardrobe

•   Small-business expenses

•   Other debt

•   Someone else’s tuition

What If I Use Student Loan Money for Nonessentials?

The use of student loans for nonqualified expenses could be reported to the Office of Inspector General as fraud, or a lender could call the loan balance due immediately. But in general, no one is tracking how you spend loan money.

Both federal and private student loans are disbursed to your school, which takes out tuition and fees, and if you live on campus, room and board. Any remaining money goes to you, so it would be hard for lenders to tell if you’re using the remainder as intended.

It can be tempting to go on a spending spree with your student loan refund, but remember that you will pay, or are paying, interest on that borrowed money.

Federal student loans have annual and aggregate limits that may seem generous, especially for graduate and professional students.

Private student loans can help fill gaps in need. These loans are not backed by the federal government and therefore not subject to its qualification rules. They may also lack the borrower protections available to federal loans, such as deferment. It’s a good idea to obtain a private student loan only after maxing out federal student aid. A cosigner can often help a student qualify.

Recommended: A Guide to Private Student Loans

Other Ways to Cover Living Expenses

Aside from using student loans, there are several ways to pay for living expenses while in school. Here are some ideas.

Part-Time Job

Getting a part-time job can help students make extra money to cover costs. Generally, these side hustles offer flexible hours so students can more easily juggle work and class. Some students may also be able to find a job that’s related to their major or career of choice.

Recommended: Jobs That Pay for Your College Degree


Federal work-study may be offered as part of a student’s federal aid package and is based on financial need. Work-study programs are available to undergraduate, graduate, and professional students, regardless of whether you are a full-time or part-time student.

Becoming a Resident Assistant

A resident assistant (RA) is usually assigned to a particular floor or wing of a dormitory to oversee dorm residents. RAs might lead mandatory floor meetings, organize monthly social gatherings, and referee the occasional roommate disagreement. Not only do you typically get a better room than others on your dorm floor, you also get free housing.


Merit scholarships are often awarded to a student based on their skill or ability for a certain speciality. They’re offered through private companies, nonprofit organizations, colleges and universities, and professional and social organizations. As you’re researching scholarships that you might be eligible for, pay attention to any requirements. Some awards have certain conditions, such as requiring that the money be used only for tuition, while others allow you to use the funds for whatever you want.

Recommended: Grants for College — Find Free Money for Students

Tuition bills are due.
Prequalify for a no-fee student loan.

Summer Job

As an alternative to (or addition to) a part-time job, you might want to consider a summer job or paid internship. During the summer, students may have more free time to work more hours and rack up cash to help cover their housing and living expenses for the following year.

Selling Unwanted Items

Cleaning out your closet? Selling castoffs on buy-and-sell apps and websites can be a quick way to earn money.

The Takeaway

Student loans can be used to cover housing, food, transportation, supplies, and other college essentials. Funds shouldn’t be used for “nonessential” expenses, like vacations, new clothes, pricey meals, or other debt. In general, no one tracks how you spend loan money. But remember, this is borrowed money that will have to be repaid, with interest. A part-time job, work-study program, and scholarships are different ways to earn extra money for expenses.

To help fill any gaps, there are private student loans, like those from SoFi. The application process can be completed easily online, and you can see rates and terms in just a few minutes. Repayment plans are flexible, helping students find an option that works for their budget.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.


Can you use student loan money on monthly car payments?

No. However, you can use loan money to maintain, insure, or fuel your car, or for public transportation fares.

Can you use student loans to pay for a gym membership?

Student loans shouldn’t be used to cover membership to a gym. Many schools have a gym or fitness center on campus that’s available to students and included in the cost of tuition.

What should you do with leftover student loan money?

It’s a good idea to return the excess money to the lender — it lowers the total cost of the loan. You could also use the funds to pay for qualified educational expenses, like tuition, housing, child care, or transportation.

Can you use a student loan to pay a tuition bill that is past due?

Yes, you can use a private student loan to pay off an outstanding tuition balance. Each lender determines how far in the past a loan can be used to pay an overdue balance, but many will allow loans to cover past-due balances that are 6-12 months outstanding.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.


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