Living off-campus may help save loan money

One of the biggest mistakes many students make that get them into serious debt when they leave school is using their student loans to cover all their school expenses. While this may be tempting for students who need to cover certain expenses that are not directly related to school, you should avoid using those funds for leisure such as vacations, trips to the beach, expensive clothing, a luxury apartment, and dinners out.

Choose Off-Campus Housing at a Reasonable Cost

When it is your first time away from home it may be tempting to invest in a luxury apartment to impress your friends, but you want to remember those friends won’t necessarily be there to bail you out when you are unable to make payments on your student loans. The best way to handle off-campus housing is to choose a roommate or two that you trust in order to reduce the cost of the apartment. This doesn't mean you are then free to move into a luxury apartment; the purpose of roommates is to reduce the total cost, not just your portion. Choose something close to campus that has the amenities you need without going overboard.

Student Loan Funds are not for Vacations or Beach Trips

If you cannot afford to take a vacation or go to the beach using your own money outside of student loan funds, you cannot afford to go at all. At no time should you use the money from your student loans for such frivolous expenses. These funds are for school-related expenses, and vacation trips do not fall into that category. Remember, the more you borrow to cover a lavish lifestyle the more you will have to repay after graduation.

Use Your Own Money for Entertainment

Things such as eating out, going to the movies, hosting parties and other entertainment do not fall under "school-related expenses." The purpose of a student loan is not to set you up in the lifestyle you plan to enjoy after you graduate and secure employment but to provide you with the funds you need to finance your education: food, clothing, shelter, tuition, books, and school supplies. Anything that does not fall into these categories is not a school-related expense and thus falls into the leisure category. This means you are justified to use those funds to buy meals on-campus during class time and purchase groceries for your dormitory or apartment, but not to take all your friends out to dinner.

Defining Leisure Can be Difficult

It can be difficult to define leisure in terms of school expenses since there are some things students need that are not direct costs related to school. However, suffice it to say if you don't need it, the item is leisure. A good rule of thumb is if you have to question whether you really need it: you don't.

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