What Can Student Loans Be Used For?

What Can Student Loans Be Used For?

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When you apply for financial aid and take out student loans to pay for college, you’re not always limited to using that money solely to cover tuition and fees. Most lenders – including the federal government and private student loan lenders – allow you to use your loan funds to pay for other education expenses in each school year.

That’s important to know, as tuition and fees make up only a portion of your actual bill. According to the US Department of Education, your total cost of attendance is the full amount you’ll pay to go to college each year. The cost of attendance includes tuition and fees, room and board, books, supplies, transportation, loan fees, and other select expenses.

The College Board reported that the average total cost of attendance is $26,590 for an in-state student attending a four-year public university and $53,980 for a student attending a private four-year school.

If you’re trying to figure out what exactly your student debt can be used for (and what they shouldn’t be used for), here’s what you should know.

Federal Student Loans vs. Private Student Loans

If you need to borrow money to pay for higher education, we recommend starting with federal student loans. They usually have lower interest rates and have more repayment options than private loans. However, some federal loans have caps on how much you can borrow each year – and have an aggregate limit – so they may not cover your total cost of attendance.

Filing the FAFSA

To qualify for federal aid, you need to fill out the Free Application for Federal Student Aid (FAFSA). It’s what the government, states, and universities use to decide if you should receive scholarships, grants, and federal student loans.

  • Your Federal Student Aid ID
  • Social Security number (or Alien Registration number if you’re not a U.S. citizen)
  • Driver’s License number, if you have one
  • Parents’ tax returns
  • Parents’ bank statements and records of investments or other assets
  • A list of schools you’re interested in attending

The financial aid offices of the schools you list will all get a copy of your FAFSA, and will use that information when creating your financial aid package for their school.

What Borrowers Can Use Student Loans For

Whether you take out federal or private student loans, your student loan funds can be used to pay for school-certified educated expenses. According to the Office of Federal Student Aid, you can use your loan amount for the following purposes:

College tuition and fees: Your loans can pay for your tuition and fees, which are the standard college costs that come with enrolling in a program and attending classes.

Room and board: Student loans can pay for your living expenses and meals, including campus payday loans in tennessee housing and school meal plans or off-campus apartments and groceries you purchase yourself.

Institutional fees: If your school charges institutional fees, such as lab fees or parking fees, you can use a portion of your loans to cover those education costs.

Books and supplies: According to The College Board, the average college student spends $1,240 on books and supplies per year. You can use your loans to pay for textbooks, notebooks, pens, book bags, and other school supplies.

Personal expenses: If you need personal items, such as ben linens for the dorm or a microwave for your off-campus apartment, you can use your loans to buy those things.

Equipment: You can use your loans to buy the equipment necessary for your schoolwork, such as a personal computer, software, or a camera if you enrolled in a photography class.

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