Friday, 8 December 2023

Books or Booze—What can I use Student Loans for?

Books or Booze—What can I use Student Loans for?
01 Oct

The American education system thrives on virtues of toil, hard work, candor, and integrity. That is how great men and women discover their true calling and become valuable assets for our nation.

Out of all the rights that exist in our honorable Constitution, the right to education takes a supreme place. It doesn’t matter if you’re rich or poor, if you’re determined enough to educate yourself and make the most of it, you’ll find a way.

Student loans are provided to budding students so that they become valuable members of society and pay them back. The question “can you use student loans for anything” is kind of slick to pop into one’s mind, because student loans are meant for your growth and development. It should stay that way.

You may also like: Here’s a Painless Way to Pay Off Student Loan Debt

But still, you’ve got to know it for the sake of understanding what can you use student loans for. It’s of utmost importance that your primary purpose of a student loan is education and expenses related to it. After all, you’ve got to be a responsible citizen and pay that money back.

Let’s get straight to the point—can you use student loans for anything? If yes, then what can you use student loans for? Would a brand new gaming console be a good start, or you’d be better off if you use that money for your in-house expenses? Read away and quench your thirst.

WARNING: You might not find the proverbial nod to go ahead and splurge on unnecessary expenses from the student loan money if that’s what you’re here for.

Can you use Student Loans for Anything?

Well, yes and no.

When it comes to student loans, the primary purpose of presenting you a hefty chunk of money is to educate you. If you feel that you can use student loans for something like a NetFlix subscription, let us remind you—there are stern boundaries.

When you get a student loan, your primary purpose has to be fulfilled—so first things first, understand the fee structure of your college. The School’s Cost of Attendance is something from which you can borrow.

So apart from tuition, fees, and accommodation (if on-campus), it’s all up for grabs. Now if we look at these, it’s safe to say that apart from tuition fees, you can save easy bucks on other components of the cost of attendance.

We’re going to look at all the possibilities and figure out what can you use student loans for, but first we’ve got to understand how the student loan money reaches into our hands.

How does the Student Loan money reach my hands?

When you go for a student loan, your loan provider has two choices. Either the provider directly disburses funds to the college on your behalf. Or funds are transferred to the student’s account from where s/he can pay the college fee.

In both these cases, you can use your student loan money (at least a part of it) to your personal fancies. If your college directly gets access to funds, it’ll disburse the remaining funds back to you.

Now the disbursement can be according to the school’s policy. Many schools disburse funds back in installments so as to encourage prudent perusal of student loan money.

This money can either be paid back to your student loan provider or you can use it on your living expenses. Basically, you can use this amount on every necessity you can think of.

You cannot just use student loans for anythingyou’ve got to draw boundaries so as to figure out what’s a necessity and what’s not. The biggest mistake that students can fall victim to is spending this money on superfluous expenses.

This money was destined to be spent on your education and if you can’t find a direct link between your education and your expenses, flush it—it’s not worth spending student loan money on.

For instance, you might use your student loan money to buy a car if it’s your only source of the commute. Buying a Smart TV from your student loan money, however, would be a dumb move.

You don’t have to do the hard work. We’ll draw boundaries so that you know where to spend student loan money and where not to splash what’s right for your education.

Now that I have ‘em—where do I Splash ‘em?

What can you use student loans for? All expenses related to your education.

Can you use student loans for anything? Kinda, but it’s better if you don’t.

Once you have the student loan money in your bank account, you don’t have a free hand on spending that money anywhere you want.

When a student signs the FAFSA (Free Application for Federal Student Aid), s/he agrees to put federal and/or state financial aid to pay the cost of attending an institution of higher education.

This includes any expenses related to your education—be it the commute to the bus stop or the bus fare, groceries and toiletries too. It’s just that you’ve got to learn where to draw the line between what’s necessary for your cost of attending college and what isn’t.

With that being said, we’re going to explore boundaries when it comes to what can you use student loans and where you can’t.

Spend your Student Loan money on:

  • Tuition expenses and fees
  • In-campus accommodation
  • Out-of-campus accommodation
  • Out-of-campus household expenses
  • Transport & Commute expenses (fuel, bus & train tickets)
  • Course-related textbooks
  • Personal necessities (medication and toiletries)
  • Monthly groceries
  • Household supplies (linen, utensils, and cooking range)
  • Fees for exams and certificate courses

NOTE: You can also use the student loan money to take care of dependants in the house. You’ve got to inform the financial aid office of your school before you do so.

DON’T waste your Student Loan money on:

  • Leisure and Entertainment
  • That spring break road trip
  • Expensive electronics or entertainment systems (that includes NetFlix subscription too)
  • A posh vacation with hotel stays
  • Means of transportation (unless it’s really necessary)
  • Paying off other personal debts
  • Dine-ins & Food delivery
  • Expenses on your small business venture
  • House/Car repairs
  • Another person’s education costs

If you think about it—you can use your student loans for anything, as long as it’s related to your necessities. But beware—you get to draw the line between what’s necessary and what isn’t.

And what if I spend it where I shouldn’t?

Come to think of it, the money is in your account already. What’s stopping you from using your student loan money wherever you want to? We’ll give you a couple of good reasons why you cannot use your student loans for anything.

First of all, you won’t have money to spend on your education, which was the prime purpose of the loan. By the end of the session, your fee would be due but you won’t have money to actually pay it.

Secondly, if it is found that you’ve been misusing your student loan money, there’s a possibility of fine and imprisonment. Schools don’t actually track where the money went, but it’s better to be safe than sorry.

It’s your money—use it wisely

Student loans are granted to you so that you learn and grow while learning from the best educational institutions in the country. More importantly, they have to be paid back once you graduate and start making money.

If you’re pondering over the question “can you use student loans for anything”, it’s better to spend it at places where it helps in your overall development. We’ve told you, and now it’s your time to think about it—what can you use your student loans for?


Tags: education, student loan debt


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