What Can Student Loans Be Used For?

By Kat Tretina | Published on February 24, 2026

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When you apply for financial aid and borrow 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 each school year.

Your total cost of attendance (COA), as defined by the Department of Education, is the full amount you’ll pay to attend college each year.

The cost of attendance formula usually includes tuition and fees, room and board, books, supplies, and other select expenses. On average, COA is $26,027 for in-state students attending a four-year public university, and $54,840 for students attending a private four-year school.

So, can you use a student loan for anything? Not quite. But you can use them for more than you think. Let’s get into the specifics of what you can, can’t, and shouldn’t use your student loans to pay for.

What you can use student loans for

Whether you take out federal or private student loans, your student loan funds can be used to cover anything that falls within your school’s official cost of attendance calculation.

That said, there are a number of common expenses that many schools approve. According to the Office of Federal Student Aid, you can usually 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 on-campus 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 may be able to use a portion of your loans to cover those education costs.
• Books and supplies: According to the NCES, the average college student spends $1,215 on books and supplies per year. You can use your loans to pay for textbooks, notebooks, pens, book bags, and other school supplies.
• Equipment: You may be able to use your loans to buy the equipment necessary for your schoolwork, such as a personal computer or software.
• Dependent care expenses: If you have a child that needs care while you’re in school, your loans can pay for childcare.
• Transportation: You may be able to use your loans to pay for commuter costs, like a car, gas, or car insurance.
• Other documented costs: If your school has additional required costs — such as school-mandated insurance — you can use your loans to pay for those expenses.
• Study abroad expenses: If you decide to study in another country, you may be able to use your loan to pay for your program and extra costs.
• Professional licensures: You may be able to use your student loan to cover it if it costs you extra to obtain a professional license or certification in your field.

What you can’t use student loans for

If you have student loan money left over after paying for tuition, room and board, and other necessary supplies, don’t spend it on the following things:

• Entertainment: Your student loans aren’t meant to pay for entertainment expenses.
• Gym memberships: Instead of using your loans to pay for your gym membership, use the university’s provided facilities.
• Travel: Don’t use your loans for vacations, spring break or otherwise.
• Dining out: While student loans can be used to pay for your regular meals, don’t waste your money on restaurants or takeout food.

Why you shouldn’t use your student loans for miscellaneous purchases

1. You’re violating your loan agreement: You’re simply not allowed to do so in the loan terms. You must certify that you will only use the loan for education-related expenses.

2. You could be breaking the law: With federal student loans, you have to certify you’ll only use your loan for educational expenses under the penalty of perjury.

3. You’ll have to pay it all back with interest: You need to start making loan payments — with interest — once you graduate.

4. You could hit your borrowing limit too soon: Federal loans have limits on how much you can borrow.

To cut down on interest charges, make a repayment plan for any student loan refunds you get right away instead of spending them on unnecessary purchases.

Can I use a student loan to buy a car?

If you have to commute to school and public transportation isn’t viable, buying a car with a student loan is almost always a bad idea. Auto loan rates are usually lower than student loan rates.

What happens to unused student loan money?

If you borrowed more than you needed for tuition, fees, room, and board, you’ll likely receive the excess loan balance as a student loan refund. At this point, you have a choice:

1. Return the money: Returning unused loan funds is the best way to avoid paying unnecessary interest.

2. Put the refund toward your first student loan payment: Use it for any existing student loan bills.

Note: The most important thing is to avoid spending your refund money on nonessential spending as it could violate your loan agreement.

Federal student loans vs private student loans

What are federal student loans?

If you need to borrow money to pay for higher education, it’s best to start with federal student loans. They usually have lower interest rates and more repayment options than private loans.

To qualify for federal aid, you need to fill out the Free Application for Federal Student Aid (FAFSA).

What are private student loans?

Private student loans can fill the gap not covered by federal student aid. If you have a good credit score, you might qualify for a lower interest rate than with a federal loan.

Can federal student loans and private student loans be used for the same things?

Generally, yes – both federal and private loans can be used for anything your school considers an eligible expense.

Learn more about Earnest student loans

Student loans can be used for a variety of expenses – anything your college considers part of its cost of attendance calculation can generally be paid with student loan funds.

With Earnest, you can use student loan refunds to pay down your student debt immediately. Earnest never charges prepayment penalties (or any other fees), and offers flexible repayment terms that you can customize to suit your needs.