Can You Use Student Loans for Anything You Want in College?

You cannot use student loans for anything you want. They are intended for expenses such as tuition, housing, books, and transportation, as listed in your school’s cost of attendance. Using them for vacations or shopping can violate loan terms and result in penalties.

So, can you use student loans for anything? No. They must be used only for approved education and living expenses that serve legitimate educational purposes.

Key Takeaways

• Student loans only cover qualified educational expenses such as tuition, housing, food, and transportation approved by your school’s financial aid office.
• Using them for personal spending or investments can cause repayment penalties or loss of eligibility.
• Federal and private lenders have different rules, with federal loans offering more protections and flexible repayment plans.
• Responsible borrowing supports your higher education goals and follows Department of Education rules.

This article explains what student loans can and cannot cover, what happens if you use student loans for something else, and how to handle them wisely. At CollegeCommit, we help students plan their funding and borrow with purpose.

What You Can Use Student Loans For

Tuition, Fees, and School Supplies

Student loans cover tuition, school fees, and required materials listed by your financial aid office or the Department of Education. You can also use loan funds to cover the cost of books and supplies. Staying within these limits ensures compliance.

If you’re new to the process, read How to Get Financial Aid for College for steps on qualifying through federal financial aid programs.

Using Student Loans for Rent or Off-Campus Housing

Loans can cover the cost of room and board, whether you live in a dorm or off campus. Always check your school’s cost of attendance to confirm eligibility.

A financial aid officer can help calculate how much of your loans can go toward housing. Our team at CollegeCommit helps families plan budgets that align with loan rules.

Food, Clothing, and Medical Expenses

Student loans can help cover the cost of groceries and basic necessities. Clothing or medical expenses may qualify if they are directly related to your studies. Avoid spending loan money on entertainment or luxury items. Responsible use helps maintain aid eligibility.

Transportation Costs

Loan funds can also cover transportation costs, such as bus passes, gas, or car maintenance needed to attend classes. These are considered qualified educational expenses when included in your cost of attendance. Keep receipts for verification.

Child Care and Dependent Expenses

Some loan programs provide funds for child care if it is required to attend classes. Parents can include daycare or after-school care as part of their educational costs. Schools may request documentation. This flexibility supports students pursuing higher education while managing family duties.

What to Do With Leftover Student Loan Money

If you receive more than needed, your school may issue a refund. Use it for academic materials or transportation only. If you don’t need it, return it to your servicer to reduce debt.

The U.S. Department of Education requires unused funds to be returned or used for future educational expenses to remain compliant.

Can You Use Student Loans for a Laptop or Technology?

You can use student loans for a laptop or required software if essential for your program. Confirm eligibility with your school and keep receipts as proof.

What You Cannot Use Student Loans For

Cars, Credit Card Debt, and Personal Purchases

Loans cannot pay for cars, credit card debt, or personal items. These are not educational expenses and violate the terms of the loan agreement. Keep academic and personal costs separate.

Vacations, Luxury Items, and Lifestyle Spending

Spending on vacations or luxury goods leads to unnecessary debt. At CollegeCommit, we encourage students to establish firm financial boundaries early on to develop healthy habits.

Is It Illegal to Spend Student Loan Money on Other Things?

Misusing loan funds may result in repayment demands or loss of future aid. In severe cases, it may be treated as fraud. Always verify expenses with your financial aid office before using loan money.

Is It Illegal to Use FAFSA Money for Anything?

Federal loans, as determined through the FAFSA, follow Department of Education guidelines. Spending them on non-school items can trigger repayment penalties.

Read how much FAFSA can cover to understand approved uses. If you’re wondering if it’s illegal to use FAFSA money for anything, the answer is no – funds must go toward qualified educational expenses.

Consequences of Misusing Student Loan Funds

What Happens If You Use Student Loans Improperly

If you misuse funds, your school or lender may demand repayment. Misuse can also affect future aid. Always use your loans as intended.

How to Return or Correct Misused Loan Money

If you used funds incorrectly, contact your servicer. Most allow returns without penalties.

Federal vs. Private Loan Flexibility

Federal loans provide more protection and flexibility than loans from private lenders, which have stricter spending limits.