5 Student Loans for Housing & Living Expenses (2024)

Student loans can cover more than tuition. They can also cover living expenses, such as housing, groceries, and toiletries. 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 exhausted your federal student loan options, consider private student loans to cover the gaps. The lenders below offer loans for housing and other living expenses.

In our reviews below, we’ve noted which living expenses each lender specifically lists as covered on its website.

College Ave

Sallie Mae

Earnest

SoFi

ELFI

Can you take out a student loan for living expenses?

You can use student loans to pay for anything that helps you get your degree, including living expenses. Common living expenses include:

• 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)

When you take out a student loan, the lender sends the funds to your school. Your school then applies those funds to your outstanding balance. You’ll get any remaining money as a financial aid refund.

Most schools deposit financial aid refunds to students’ bank accounts. Once the transfer goes through, you can use your refund as you see fit. Whether renewing your parking pass or restocking your dorm fridge, your leftover loan proceeds can help cover the cost.

How to use student loans for living expenses off-campus

Loan-eligible living expenses aren’t limited to on-campus charges. You can put your loan proceeds toward off-campus living.

When you get your financial aid refund, swipe your card or withdraw cash at the ATM to pay for regular bills or one-off purchases, such as:

• Rent, security deposits, and pet fees
• Electric, gas, water, and sewer bills
• Cell phone and internet access
• New furniture
• On-campus parking passes
• Moving costs

This is the major difference between using student loans for off-campus expenses:

When you live in a dorm, what you pay for room and board covers your housing for the entire term. You don’t have separate utility costs; recurring living expenses are limited to costs such as your personal cellphone plan.

However, you’ll pay rent and utilities every month if you have an apartment off campus. Budgeting and staying on top of bill due dates is imperative, especially when you use student loans to help make ends meet.

Federal student loans vs. private student loans for housing expenses

Federal student loan funds don’t process until about four weeks after school starts. To be settled and ready for the first day of class, you may need your 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 different from their federal counterparts. Because approval for a private loan is based on creditworthiness instead of financial need, lenders may disburse the money to you instead of your school.

If you can’t wait for your college to process your loan disbursem*nt, private loans could help bridge the gap. Remember that private loans aren’t eligible for federal repayment plans or forgiveness programs. Exhaust your other financial aid and loan options before turning to private student loans.

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 can put you further in the hole.

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.

✅ Do

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

❌ Don’t

You shouldn’t use your loan funds to cover:

• Spring break trips
• Nights out at bars
• A luxury apartment
• Designer clothing
• Expensive electronics
• Restaurants or takeout
• Treating your friends
• A car you don’t need to get to class (or a vehicle you couldn’t otherwise afford)

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 lender finds out you’re misusing funds, your loan could be terminated, and you could be forced to pay back the full amount borrowed.

But lenders aren’t likely to look into how you’re using the funds. Their main concern is your ability to repay the loan. Other consequences for irresponsible spending include:

1. You could hit your lender’s lifetime student loan limit prematurely.
2. You might be unable to afford your loan payments when you leave school.

If you max out your student loans before you finish college, you may have difficulty paying tuition. And without student loans as a backup, your living expenses could stretch your budget beyond capacity.

Even if your lender doesn’t call your loans due now, you’ll still need to repay those funds. Overspending can lead to overborrowing, which could affect your finances and credit for years.

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 kids, you can also use student loans to pay for 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.

Keeping your address updated is crucial if you’re on an income-driven repayment plan. 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.

How we selected the best student loans for living expenses

LendEDU evaluates student loan lenders to help readers find the best student loans. Our latest analysis reviewed 725 data points from 25 lenders and financial institutions, with 29 data points collected from each. This information is gathered from company websites, online applications, public disclosures, customer reviews, and direct communication with company representatives.

These star ratings help us determine which companies are best for different situations. We don’t believe two companies can be the best for the same purpose, so we only show each best-for designation once.

Recap of student loans for living expenses