Is Using Student Loans for Living Expenses a Good Idea? | Inquirer

Is Using Student Loans for Living Expenses a Good Idea?

10:00 AM March 19, 2020

Using student loans for living expenses is a topic that is sensitive for students, both in and out of college. Before college, the worry revolves around how to get college paid for you or even get into one.

Once in college, the financial decisions revolve around whether or not to get a student loan. what kind, the main expenses of the federal government loans, and how to use the loan availed, and so on.

The decision on how to spend your student loan is not one that should be taken lightly.

Ready For a Quick Quiz?

What is a Student Loan?

student loan

A student loan is a credit facility given to any recognized student either by the federal state or a financial institution.

The sole purpose of a student loan is to make the education journey seamless.

Different loans have different options and cash expenses allowed.

Depending on the terms of your loan provided, some parts of your college life may not be catered for within the loan allocation.

What are the Main Expenses of the Federal Government?

federal government expenses

The federal pell grant usually is available if you are part of any program that eventually leads to an undergraduate degree or certificate.

The significant costs usually covered are:

  1. Tuition and college fees
  2. Living expenses such as room and board
  3. Books, additional supplies, transportation, and miscellaneous costs
  4. An extra allowance for costs incurred to dependents for students who have dependents declared

How to Get Colleges to Pay for Rent
student loans for rent

To apply for a federal student loan, you must first file the FAFSA form, at

Next, you will receive a financial aid award letter by mail from the school’s office of financial assistance. This letter will provide all the information as to what loans are available and your eligibility.

You will then be expected to accept the financial aid from the school along with whatever available student loans will be given.

The last and final step is the acceptance and signing of papers.

Depending on the financial aid package, a portion of the federal pell grants is always sent to the school to cater to college fees, books, as well as room and board.

The remainder will then be sent to the student for discretionary spending.

What do Room and Board Mean?

Most student loans always cover the cost of room and board.

Room refers to the accommodation you choose to seek during the fiscal year. Board refers to the meals. The money may be paid to the school directly or sent to your bank.

The portion of the loan granted to college students for room caters for the dorm room or in-school housing or other areas out of school where you may be required to pay rent.

It is essential to take note of whether or not your private student loans cater to housing.

Are there Student Loans for Housing?

student housing

Housing expense is one of the highest costs in college.

Most scholarships and grants tend to shy away from providing the allowance for the room because of the versatility of living.

Private lenders, on the other hand, thrive in this particular field.

They provide personal loans at fixed interest rates allowing you, as a student, to comfortably afford the transition into higher education without having to live in a dorm room.

Federal pell grants only cover housing costs up to a certain level, which is limited in terms of choices and areas one can live off-campus.

Student Loans for Rent

It is entirely okay to use your student loans for rent.

If the federal budget allows that room to be included in federal spending, do not shy away from living in a comfortable environment for the sake of school.

Part of the campus experience is to prepare you to quickly and comfortably transition into life.

Part of this is getting to live by yourself, pay bills, and live with other tenants who may not necessarily be students.

Simply put; this may mean living off-campus.

What to Do if your Student Loan Does Not Cater for Rent Expenses

rent payments

The most important part of the college experience is to be able to leave college ready for life.

Life ahead depends on the financial decisions that students make in college. One of the things that tend to stick around is bad credit.

Your credit history cannot be erased and is solely dependent on what loans you choose to receive.

If you feel you absolutely can afford living out of school, then by all means, seek out a private lender and get a personal loan.

Be sure, however, to keep a clean record of how you spend. Ensure your rent is well paid out. If you can pay beforehand, the better.

At all times, seek to ensure that you are aligned with the mission and terms of the loan facility.

What if I Choose Not to Get a Student Loan?

The other side of the coin is equally valid in this case.

If at any point the premise of an additional loan does not excite you, be sure to make do with whatever confined the federal grant restricts you to get a student loan for living expenses.

Living in a dorm room is excellent; you get to learn about the community just as much as you do the dangers of overfamiliarity.

College is like high school. It’s a little harder with less supervision, but the same rules apply.

What better way to get a grasp of it all than to immerse yourself fully in the experience?

While at it, of course, a little financial discipline and lessons on life never hurt anyone.


Taking student loans for living expenses is allowed. It is undoubtedly encouraged in certain situations where the options are meager.

It is essential, however, to note that income tax interest will eventually be calculated for all loans that you take during your study period.

This is not limited to the federal ones.

An overall assay of the pros and cons of the ease of campus life vis a vis clean credit history should be undertaken.

Having said that, however, student loans do make college life more comfortable; it holds no benefit for the present to worry about the future at the cost of present peace.

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