Are there limits to what I can use student loans to pay?

robbeh

I've heard that basically, you can spend student loans on whatever you need to spend it on. I've heard of people making downpayments on a house and buying jet skis. If I'm given the money, does it matter what I spend it on?

Scooter

From what I've heard, my brother-in-law's family got his student loan money and spent half of it on house renovations. Anecdotal, though.

AManFromEarth

Student loans are meant to be spent on education and related expenses. Of course, money is fungible and the definition of "expenses" is pretty wide ranging.

However, regardless of what your school's financial aid department tells you you should only ever ever ever take out the bare minimum of loans and only for what you absolutely need to spend to stay in school and not die.

And if it can be at all avoided, do not get private loans. Federal or bust. Sacrifice the time and social life to get a second job if you have to, your bank account post graduation will thank you.

L Ron Howard

In the US, in order to complete the FAFSA, it's required of you to take a quiz that tells you the answer.
I couldn't tell you about the rest of the world though.

projectmayhem

Trust me on this, fuck private loans (sally may for example). Only take out federal. Only use that money to pay for classes/books. If you end up with left over money, do not spend it. Dont you fucking dare spend it. Send that shit back. Some people might say, 'oh dont tell people how to spend there' no fuck that! I'm telling you right now that student debt is shitty. Its sole purpose is not to get you through school, its purpose is to fuck you up. it does that by telling you, 'nah man its cool, you can totally buy a playstation'.

But to answer your question, you can spend it on whatever you want, just be warned that is a fuckawful thing to do and I promise you, it will be somethng you regret.

Esh

You can spend them however you want, but advice, never take out private.

Gigazombie Cybermage

Well, technically you promise only to use them for stuff for school or things that make your life in school easier (gas, food, an actual laptop) but there's no real way for them to find out if you spend it all on other stuff. I think. I wouldn't recommend blowing it on bullshit though.

Invisible

It's a pretty bad idea. Not because of the possible legal ramifications, but that you'll take on debt that you can't discharge and you'll end up in a worse position financially. Unless you're in some kind of dire, emergency circumstance don't take out more than you need in student loans.

bowen

Esh wrote: »

You can spend them however you want, but advice, never take out private.

Rend

Esh wrote: »

You can spend them however you want, but advice, never take out private.

WildEEP

Federal loans and Grants are sent directly to your school to pay for costs of tuition. If the Grant or Loan is greater than the amount of tuition, you are sent a refund check from the school with the remaining balance. This balance is intended for use in relationship to your schooling, i.e. room & board, books, computer, etc. but you could spend it on whatever.

Private loans can follow almost any format - some just cut you a check, some send it via the same route as the federal system.

CyberJackal

As someone who went to college largely on loans, I'm going to take a slightly different tack and say that depending on your situation you may want to take whatever you can get (from federal loans, at least). Your expenses from semester to semester are going to vary (rent hikes, book costs, emergencies, etc), but what you may not be aware of is that the amount of student aid you get from year to year can change as well. Next year they may give you less.

What you do with this money, however, is save it for emergencies. Do not spend it on fucking jet skis. Trust me, I speak from experience when I say that you will regret that impulse purchase when you've graduated, you can't find a job, and those loan companies start hounding you for their money back.

Jam Warrior

So short is answer, you can spend it on anything. You should avoid doing so if at all possible.

Welcome to adulthood and taking on the consequences of your own actions!

MagicToaster

robbeh wrote:

If I'm given the money, does it matter what I spend it on?

I don't suggest spending any money from the loan than you absolutely need to spend. But if you insist on living in debt, you'd be better off putting $5,000 into a horizon-broadening student trip to a foreign country than into a SeaDoo or a Mitsubishi Lancer.

After your trip/SeaDoo/Lancer, enjoy the next decade of your life paying off your short trip to college.

Cog

I spent a bunch of my private loan on a used car. And then uh... spent the next decade of my life paying off my short trip to college.

Yeah, don't do that.

AManFromEarth

CyberJackal wrote: »

As someone who went to college largely on loans, I'm going to take a slightly different tack and say that depending on your situation you may want to take whatever you can get (from federal loans, at least). Your expenses from semester to semester are going to vary (rent hikes, book costs, emergencies, etc), but what you may not be aware of is that the amount of student aid you get from year to year can change as well. Next year they may give you less.

What you do with this money, however, is save it for emergencies. Do not spend it on fucking jet skis. Trust me, I speak from experience when I say that you will regret that impulse purchase when you've graduated, you can't find a job, and those loan companies start hounding you for their money back.

This is bad advice. Do not take out more than you need. Maxing out your loans because you might get less next year is a bad, bad, bad, bad idea.

bowen

Well depending on if you know your tax situation is going to change and you're going to be forced to use private loans to fill the gap, it would be a good idea. Avoiding private lenders like Sallie Mae should be the first thing you do. If that means robbing peter to pay paul, do it, avoid dealing with private lenders at all costs.

Rend

I had a friend who spent about 70% of his student aid on warhammer armies.

It's not hard to guess the effect this had on his situation. Just a cautionary tale.

Darkewolfe

Rend wrote: »

I had a friend who spent about 70% of his student aid on warhammer armies.

It's not hard to guess the effect this had on his situation. Just a cautionary tale.

He had an awesome time and got to be a famous Warhammer player professionally?