Sep 27, 2018 Lindie Johnson

Can you take out student loans for living expenses?

The cost of college tuition, fees, room, and board can put a financial strain on pretty much any family budget. But college costs are not limited to those you have to pay directly to the school. Living expenses - like off-campus housing, gasoline, travel expenses, food, and other miscellaneous costs - can easily add up to thousands of dollars.


We have laid out the options for covering these expenses below. Keep in mind that borrowing student loans for living expenses - although possible - isn't necessarily in your best interest. Explore the alternatives and use borrowing as a last resort. 

  1. Work-study or a part-time job: If you were awarded work-study funds, you'll need to find a work-study job. The work-study amount on your financial aid award letter isn't provided up front and doesn't go directly to your tuition bill. This money is earned just like funds from any part-time gig, and paid directly to the student. Despite conventional wisdom, part-time work can actually help a lot of college students stay on track and studies show it isn't likely to interfere with school work. Limit the amount you borrow to cover living expenses by planning a monthly budget and applying work-study or part time job earnings to cover those costs instead. 
  2. Monthly allowance: If you are a parent, you probably don't have a large sum of cash to deposit into your student's bank account to cover living expenses for a full year. If you feel strongly against your child working during the school year, or know that his or her part time earnings will not be enough to cover all living expenses, consider making a monthly allowance payment to your child. Teach him or her the responsibility of making that money last by budgeting it over the month, while giving yourself time to earn the money to help cover living expenses. 
  3. Summer earnings: Part of your financial aid eligibility calculation is based on how much the student has in his or her own bank accounts. Students are expected to contribute a higher percentage of their assets to college expenses than their parents are. Instead of applying student assets directly to tuition costs, consider setting them aside to help cover monthly living expenses. 
  4. Student & parent education loans: When a school provides a financial aid package, they will provide your family with a breakdown called the Cost of Attendance (COA), which includes tuition & fees, rooms and board, travel, books, and living expenses. You can borrow up to the total COA minus any other financial aid you receive. For example, if the total COA is $40,000 and you receive $20,000 in grants, $3,000 in work-study and $3,500 in federal student loans, the difference is $13,500. That is the maximum amount you can borrow and that the school will be willing to certify. You can use these funds to directly pay tuition or cover indirect costs like living expenses. Typically, funds are sent directly to the school by the lender and any over-payment is refunded to the student. 

In short - yes - you can borrow to cover certified college living expenses, but it comes at a cost. Remember to think carefully before you do this, understand the total costs of borrowing (use our payments and interest calculator here), compare your options, and limit the amount you finance. 

Need help covering college expenses? Check out RISLA's low fixed rate loans

Learn more and apply online



Published by Lindie Johnson September 27, 2018
Lindie Johnson