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Last update: July 23, 2024
4 minutes read
Learn what private student loans can cover. From tuition to personal expenses, take charge of your college finance journey.
By Brian Flaherty, B.A. Economics
Edited by Rachel Lauren, B.A. in Business and Political Economy
Learn more about our editorial standards
By Brian Flaherty, B.A. Economics
Edited by Rachel Lauren, B.A. in Business and Political Economy
Learn more about our editorial standards
Ever wondered, "What can you use a private student loan for?" It's a question many soon-to-be students grapple with while exploring college finance. You can use a private student loan to cover many college-related expenses, ranging from tuition and accommodation to textbooks and transportation costs. In this post, we'll dive deep into these specifics so you can better understand your borrowing options.
What can you use a private student loan for? Primarily, these loans are used to bridge the gap between your college costs and any other financing you may receive, like federal student loans or scholarships.
A private student loan is like an extra lifeline while in school, but using it properly requires a solid understanding of what can be covered with this kind of loan. Let's break it down:
Private student loans can feel like walking a tightrope sometimes. You don't want to fall into unnecessary debt, but you also need to fund your education. To help, here's a simple table of do’s and don'ts when using private student loans.
Use loans for academic expenses
Compare loan offers
Budget your expenses
Borrow what's truly needed
Use loans for luxury items
Choose without prior research
Borrow more than you need
Neglect loan terms
College costs can vary a lot from student to student, as well as by institution, geography, and degree program. This data table offers an easy way to see how costs can break down, and how private loans can potentially cover them.
Expense Category | Average Cost Estimates (Annually) |
---|---|
Tuition and fees | $10,000 - $40,000 |
Housing | $11,000 |
Books & Supplies | $1,200 |
Transportation | $1,000 |
Personal Expenses | Varies |
College finance can be confusing, but we simplify it for you. We offer personalized solutions for private student loans, student loan refinancing, scholarships, FAFSA assistance, and credit card offers. Our services cover tuition, housing, and personal essentials, tailored to your unique needs. Let us handle your financial worries so you can focus on your education and future.
The amount you borrow should be guided by your financial need, cost of tuition, living expenses, and other college costs that aren't covered by your scholarships or federal loans. However, we recommend you only borrow what you need and can reasonably repay after graduation.
Private student loans are mainly meant to cover your educational and related living expenses. While they might technically cover other costs, it wouldn’t be financially wise or sustainable to use them for unnecessary purchases or luxuries.
If your lender discovers that you’ve used loan funds for non-approved expenses, they may assess penalties or other fees. Worse, the loan might go into immediate default. Aside from these punishments, spending the funds on non-educational or non-essential expenses can lead to financial difficulties down the line, as you'll eventually need to repay the loan with interest. It's wise to use your loan responsibly, keeping in mind its purpose and your future financial stability.
Getting into college isn't easy, and figuring out how to pay for it adds another layer of challenge. Private student loans can be both a lifeline and a source of stress. The key lies in understanding what you can and can't use the money for.
You're not alone, though. We at TuitionHero are committed to guiding you toward smart decisions about your education fund. Browse through our offerings today to start crafting your personalized college finance strategy.
Brian Flaherty
Brian is a graduate of the University of Virginia where he earned a B.A. in Economics. After graduation, Brian spent four years working working at a wealth management firm advising high-net-worth investors and institutions. During his time there, he passed the rigorous Series 65 exam and rose to a high-level strategy position.
Rachel Lauren
Rachel Lauren is the co-founder and COO of Debbie, a tech startup that offers an app to help people pay off their credit card debt for good through rewards and behavioral psychology. She was previously a venture capital investor at BDMI, as well as an equity research analyst at Credit Suisse.
At TuitionHero, we're not just passionate about our work - we take immense pride in it. Our dedicated team of writers diligently follows strict editorial standards, ensuring that every piece of content we publish is accurate, current, and highly valuable. We don't just strive for quality; we aim for excellence.
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