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How Can I Use My Private Student Loans?

When you receive your award letter from your college of choice, you’ll see a couple of important numbers listed – the estimated cost of attendance (COA), and any financial aid for which you are eligible, such as scholarships, grants, and federal loans/work study.

What is Cost of Attendance (COA)?

The COA typically includes costs for one academic year:

  • tuition and fees
  • room and board (including a meal plan) or off-campus housing
  • books, supplies, transportation, and other school-related personal expenses

Keep in mind that while some of these costs (e.g. tuition and fees) are fixed costs, others could be higher or lower based on your personal situation. For example, if you purchase used books or do not park on campus, your actual costs could be slightly less than what the college lists.

Many students will need more funding than what is included in their financial aid package to fully cover the balance, which is where private student loans come in.

What Do Private Student Loans Cover?

Great news – a private student loan like our education line of credit can be used for any items listed in your cost of attendance, or other education-related expenses! The amount you are eligible to borrow will be certified by your school, and the funds are sent directly to your college. Some examples of these items include:

  • Personal laptop or computer: this one is obvious, but you can also use your private student loan to cover software and other class-specific equipment such as art tablets or cameras
  • Reasonably priced car for transportation: this has the potential to make a big dent in your private student loan, so make sure you do what you can to keep costs down (e.g. looking at used car options, less-sporting models, etc.)
  • Meal Plans: this may be another obvious option, but it is important to note that private student loans do not cover meals at restaurants or ordering take out.
  • Studying Abroad: you may use your private student loan to cover the cost of a study abroad program and any additional travel expenses within reason.
  • Dependent Care: if you are a parent, your student private loan can be used to cover childcare expenses.

If some of the loan will be used to cover items not directly paid through the school, such as books, off campus rent, or a laptop, the school will issue you a refund for the excess amount. You may need to pay for some of these expenses before your refund arrives; in this case, be sure to use your refund to reimburse yourself and not for personal purchases!

Example: Your school receives $15,000 from your loan disbursement. Only $12,000 is needed to cover your tuition balance. The school will issue you a refund of $3,000 to pay for out-of-pocket education costs. You can then use those funds to purchase necessary items, or to recoup what you have already paid.

If you are unsure of what your private student loans do not cover, or are curious about how to use some left over money after cutting-costs, here are some things that you should NOT spend your private student loans on:

  • Travel for Leisure: travel for leisure or spring break is not something that is rightfully covered by a private student loan.
  • Non-Essential Room and Board: things like bed sheets, mattresses, and pillows are covered by private student loans, but shag rugs, posters, and other purely decorative items are not.
  • Entertainment: This takes on many forms, but you won’t be able to pay for streaming service subscriptions (e.g. Hulu, Netflix), movies, or video games with private student loans.

The terms and conditions for private student loans will vary depending on the organization you borrow from, but it is generally good advice to avoid spending parts of your loan on frivolous and non-essential costs similar to the ones listed above.

How Do I Apply for an Education Line of Credit?

If you’re not already a member of a credit union, we can help match you with one for your student lending needs. Ready to learn more and apply? Find a credit union and apply easily online.

This post was updated on 11/4/2022.

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*APR = Annual Percentage Rate

In order to apply for a loan, you must first pick an individual credit union from which you wish to borrow. You can apply for the loan without being a member of the credit union you select, but you will need to become a member of that credit union in order to receive a funded loan. Therefore, it's important that you select a credit union that you will be eligible to join. Credit union membership requirements can include where you live, work, or attend school. Results are based on membership criteria provided by individual credit unions and do not imply a guarantee regarding accuracy or eligibility to join the listed credit union(s).

Calculations are based on the lowest possible rate and available repayment terms per lender. Rate estimates are based on credit information entered by the user and will not impact your credit. During the application process, a hard credit inquiry will be performed to provide exact rate information. Repayment calculations assume immediate full repayment. View the full range of rates and terms by visiting your credit union's website using links listed for each credit union above.

Using the free student loan refinance calculator does not constitute an offer to receive a loan and will not solicit a loan offer. Any payments and savings will depend on the actual amounts for which you are approved, should you choose to apply. This calculator is provided for educational purposes only and should not be relied upon as financial advice. Always consult your credit union or financial advisor when making your decision.

IMPORTANT NOTICE for refinance borrowers: By refinancing federal student loans, you may lose certain borrower benefits from your original loans. These may include interest rate discounts, principal rebates, or some cancellation benefits that can significantly reduce the cost of repaying your loans. Please review this important disclosure for more information.

Your actual rate within the range stated will be disclosed upon approval. Student borrowers may apply with a creditworthy cosigner which may result in a better chance of approval and/or interest rate.