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The purpose of federal or private student loans you receive is to help cover the costs of attending college – including tuition, room and board, and textbooks. After these costs have been paid, the remainder of your student loan funds may be available to cover additional education expenses. If you receive one of these checks, you may wonder: Can I spend this money on something “fun” instead? Well, yes and no.  

What can student loans be used for?

Student loans are meant to help people with financial limitations to attend college. As such, they’re intended to make the cost of attending school manageable by helping pay for “qualified educational expenses.” Per the U.S. Department of Education, these qualified expenses include:

  • Tuition and related fees
  • Room and board (on- or off-campus)
  • Textbooks
  • Equipment and supplies, such as a computer, notebooks or course-specific materials
  • Transportation
  • Childcare

How will I receive my student loan money?

The bulk of the money you receive as a student loan usually goes directly to your school to pay for your tuition, fees and housing. After that, you may receive the remaining funds as a check, which is intended to be used to pay for personal expenses relevant to your education (such as textbooks, transportation costs or a new laptop). This lump sum can arrive at the beginning of the school year or the semester, although some schools have started distributing these funds in installments to encourage more responsible spending among students.

Can I use student loan funds for noneducational expenses?

When you apply for a student loan, you agree to use these funds for your education. With that said, once the remainder of a student loan becomes cash in your pocket, you’re not required to report how you choose to spend it. Citing a Google Consumer Survey, Bloomberg reports that many recent grads used some of their student loans to dine out, catch a baseball game or even go on spring break.

American students aren’t alone. Students in the U.K. told Whatuni.com they’d spent their student loan funds on such things as casino gambling, a French bulldog and even an aquarium full of sea monkeys. But splurging on noneducation expenses may leave you without enough money for what’s important – your education – and either way, you’ll have to pay back your loans. 

Also, remember that lying on the FAFSA in order to get more money is a federal crime that can result in major fines, prison time or both.

Be smart with your student loans

Remember, student loans must be paid back. Citing 2016 statistics, U.S. News & World Report cites that the average graduate today has more than $37,000 in student loan debt. One of the best ways to manage that debt is to be smart about how much you need to borrow. If you get a refund check, you don’t have to spend it. Instead, return it and lower your debt obligation.

If you think your current student loans may not be enough for your education, check out our guide explaining 10 ways to solve last-minute tuition gaps. And don’t forget to apply for the $5,000 Nitro College Scholarship.

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