Can I use my student loans to pay for living expenses?

Federal student loans, sometimes called Direct Loans, Stafford Loans, or Perkins Loans, can be used to pay for education-related expenses. These expenses are included in your school’s published cost of attendance (COA), often referred to as a student budget.

When you sign the FAFSA (Free Application for Federal Student Aid), you agree to use the federal and/or state financial aid you receive to “pay the cost of attending an institution of higher education.”

Cost of Attendance

The cost of attendance, defined in the Higher Education Act of 1965, includes:

• Tuition and fees
• Room and board (including off-campus housing)
• Books and supplies
• Transportation (cost of travel to/from school, but not for purchase of a vehicle)
• Miscellaneous personal expenses
• Cost of rental or purchase of required equipment, materials, and supplies
• Personal computer (if enrolled at least half-time)
• Dependent care expenses
• Disability-related expenses
• Loan fees
• Licensing and certification fees for students enrolled in programs requiring the student to obtain professional licensure or certification
• Reasonable costs associated with a study abroad program approved for credit at the student’s home institution
• Expenses associated with a cooperative education program

Room and Board

Room and board costs can include one of four allowances, depending on where you live:

• On-campus in housing that is owned or operated by the college
• At home with parents (only applies to students without dependents)
• In housing on a military base or for which a basic housing allowance (BAH) is provided (allowance restricted to board; room is excluded because it is already paid for)
• Off-campus

If you are enrolled less than half-time, your room and board allowances may be limited.

How to Increase Your Expense Allowance

Your school determines how much to allow for each expense. However, if you can document higher costs than specified in the allowances, you can appeal to your school for a possible adjustment to the cost of attendance.

For example, you should keep receipts for all of your textbooks and supplies. If your actual costs are higher than what your school estimated, ask the financial aid office to increase the textbook and supplies allowance.

Some colleges don’t include certain allowances in the cost of attendance, but will add them if you document the expenses and make a formal request. Dependent care expenses, disability-related expenses, and the cost of a computer and software sometimes fall into this category.

Computers and Software Limits

Some colleges limit the purchase of a computer to just once during your educational program, unless there are extenuating circumstances (for example: theft, destroyed in a natural disaster, etc.). Many colleges will want to see a paid invoice for the purchase of a computer before they will add the expense to your cost of attendance. Colleges may increase the cost of attendance to cover the cost of required software, including operating system updates.

Health Fees

Your school might include a required health fee in the cost of attendance. It may not be clear if health insurance can be included in the cost of attendance. The cost of attendance for some colleges will include the cost of student health insurance, if it’s required by the school. Others do not. You should also ask your school if the cost of attendance can include ongoing medical expenses, such as expensive prescriptions.

Special Circumstances

If you have special circumstances, you should appeal to the college for an adjustment to your cost of attendance. Some colleges will make an adjustment to the cost of attendance to increase aid eligibility when your expected family contribution (EFC) is already zero.