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From books to burgers: What you can use student loans for—and what you can’t

College • July 24, 2019 • Lisa Litant


What you’ll learn

  • What to use—and not use—your student loan money for
  • What to do with leftover loan funds


Imagine this. You’ve signed all your student loan paperwork and your loan has been disbursed (sent) to your school. Your school takes out what it needs for tuition, room/board, and fees. Then you get the remainder of your loan amount in the form of a debit card or a check.

Let’s talk about what you should do next.

What you should—and shouldn’t—use your student loan money for

Got leftover money from your student loan? Time to treat yourself to a new college wardrobe, right? Not exactly.

Leftover loan money might feel like a windfall, but it’s really not. Remember—you borrowed that money and you’ll have to pay it back with interest when your loan is due.

Consider sending the leftover funds back to your federal or private student loan servicer as a loan payment. That way, you can reduce your total loan cost and graduate with less student loan debt.

Otherwise, use your leftover student loan money for anything you absolutely need for school. As a rule of thumb, ask yourself, “Do I need this to allow me to attend school?” For instance, if you’re a film student, you may need special camera equipment for a class you’re taking.

Here’s what student loans should and shouldn’t be used for:

Things you should use your student loan to pay for:

  • Books and supplies
  • Room and board (meal plans)
  • Off-campus housing
  • Transportation (gas, bus pass, etc.)
  • Repairing a car that you use for school
  • Child care
  • Computers
  • Any equipment you need for classes
  • Sheets and towels

Things you should not use your student loan to pay for:

  • Pizza and beer for your roomies
  • Spring break travel
  • Taking your family out to dinner
  • Buying a new Mercedes
  • An outfit for a friend’s wedding
  • Cleaning services
  • Entertainment (sports, theater, etc.)

Making smart financial decisions

Ultimately, any leftover loan money is yours to use how you’d like. But remember, any money you use to throw a party for your friends at college is going to end up costing you way more in the end, when you factor in the interest that will accrue. Part of adulting is making smart financial decisions. Why not start now?

If you have questions about paying for expenses with your student loan (federal or private), you can always ask your school’s financial aid officer for guidance.


Lisa Litant is a content manager at Sallie Mae. When she’s not helping people save and pay for college, she travels, sings cabaret music, and blogs about jewelry.


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Sallie Mae does not provide financial, tax, or legal advice and the information contained in this article does not constitute tax, legal, or financial advice. Sallie Mae does not make any claims, promises, or guarantees about the accuracy, completeness, or adequacy of the information contained in this article. Readers should consult their own attorneys or other tax advisors regarding any financial strategies mentioned in this article. These materials are for informational purposes only and do not necessarily reflect the views or endorsement of Sallie Mae.