What Can You Use Student Loans For? A Breakdown of Eligible Expenses

Understanding the scope of student loan usage is crucial for borrowers managing their finances while pursuing higher education. With rising tuition and associated costs, knowing what expenses can be covered by student loans can alleviate financial stress and ensure funds are allocated effectively.

This article explores eligible expenses that student loans can cover, clarifying how these funds support various aspects of a student’s academic journey.

Institutional and Mandatory Fees

Student loans cover institutional and mandatory fees, which are charges universities and colleges require for enrollment. These fees often include library access, technology services, and student health services. For example, technology fees support computer labs and online resources, while health service fees provide access to medical care and counseling.

Each institution has its own fee structure, which may include specific charges like laboratory fees for science courses. These fees ensure students have the necessary resources for their programs. Understanding these components helps students make informed financial decisions.

Course Supplies and Materials

Student loans can fund course supplies and materials, including textbooks, which are often costly. For instance, a single textbook for a medical or engineering course can cost hundreds of dollars. Beyond textbooks, loans cover essential items like lab coats, art supplies, and musical instruments required for specific fields.

In addition, many courses now require specialized software or digital tools. Engineering students might need AutoCAD, while graphic design students could require Adobe Creative Cloud. These tools are critical for academic success and can be financed through loans.

Housing and Meals

Housing and meals are significant expenses that student loans can address. On-campus housing options, such as dormitories, often include meal plans, both of which are part of a student’s overall cost of attendance.

Choosing between on-campus and off-campus living impacts budgeting. On-campus options offer convenience but may cost more, while off-campus living provides flexibility and requires managing additional expenses like utilities and groceries. Student loans can cover these living expenses, including meal-related costs like groceries or dining out, ensuring students maintain proper nutrition.

Commuting and Transportation

Transportation costs, whether for public transit, fuel, or vehicle maintenance, are often overlooked but can be covered by student loans. Public transportation, common in urban areas, might require monthly transit passes, while students who drive must account for gasoline, parking permits, and vehicle upkeep. These expenses are essential for consistent class attendance and can be factored into loan budgets.

Equipment and Technology

In today’s academic environment, equipment and technology are indispensable. Student loans can finance tools like laptops or desktop computers, often required for coursework. Universities may specify minimum hardware requirements, especially for students in technical fields.

For example, engineering students may need high-performance computers for CAD software, while loans can also cover accessories like monitors and ergonomic chairs. Essential software, such as Microsoft Office or specialized programs like MATLAB, is also eligible for funding through loans.

Childcare Costs

For student-parents, balancing academics with childcare is challenging. Student loans can cover childcare expenses, including daycare services, after-school programs, or in-home childcare providers. Some universities offer on-campus childcare centers, which may be more affordable. Loans help student-parents manage these costs, allowing them to focus on their studies.

Student Loan Refund Usage

If a loan disbursement exceeds direct costs like tuition, students may receive a refund to cover indirect educational expenses such as rent, groceries, or utility bills. Managing these refunds wisely is essential to avoid unnecessary debt.

Creating a detailed budget helps ensure refunds are used for their intended purpose. Some students may choose to return unused portions to reduce their loan balance and minimize interest accrual.