Taking out student loans to pay for a nice apartment

[gradschoolstinks]

Ok, so I got a full tuition scholarship at a school that I'd like to attend, but no graduate stipend. While I'd entertain the idea of living with roommates, I'd *love* to have a place to myself and my dog, but that's gonna cost me.

Is it ridiculous to 1) Take out federal loans to pay off a credit card debt? and 2) Take out federal loans to pay for rent? In a nice apt that I otherwise couldn't afford?

I figure I can work my you know what off during grad school, but all in all probably won't amount to enough to pay for a 1BR apartment.

Who the heck wants to live with roommates when you can have a place to yourself??

Anyone planning on taking out student loans to pay for living expenses? Is this normal?? Help!!!

[socnerd]

I was under the impression that you can't take out student loans to pay for anything other than school tuition. You can't just use that money for anything you want (like rent) even if it does have to do with going to school, that's fraud.

[gradschoolstinks]

I was under the impression that you can't take out student loans to pay for anything other than school tuition. You can't just use that money for anything you want (like rent) even if it does have to do with going to school, that's fraud.

Oh...right. There goes that idea! :-)

[khalif54]

Actually the precious poster is INCORRECT!!!. Student loans can be taken out to cover Cost of Attendance. This includes tuition, room and board, health insurance, etc. Students loans are for Cost of Attending an institution not just for tuition. Read title IV.

[socnerd]

I mean this is just speculation but there is probably a difference between taking out a loan for room and board (which gets paid to the school) and taking out a loan so you can live in a fancier private apartment.. But I guess if you qualify for the loan and you take out a lot of money for that it'll just be your responsibility to pay it back if that is what you want to spend the money on.

[mudlark]

Dude. Suck it up and get a roommate.

Actually, I take it back. Pile on tons of debt and dig your own grave.

You're not even attending yet and your username is gradschoolstinks? You feel entitled to a solo place... for what reason? You can't stand the thought of rooming with someone?

The negativity! It burns!

[socnerd]

Dude. Suck it up and get a roommate.

Actually, I take it back. Pile on tons of debt and dig your own grave.

You're not even attending yet and your username is gradschoolstinks? You feel entitled to a solo place... for what reason? You can't stand the thought of rooming with someone?

The negativity! It burns!

I wouldn't rag too much on not wanting a roommate, I personally will never under any circumstances consider having one again after the terrible experiences I've had in college. I am planning on going to school in DC and will have to budget at least $1500/month for a decent studio apartment, now I'm sure I might be able to save some money if I had a roommate but the hassle is NOT worth it for me. I have had 2 years of hell being forced to live with the people I do now, things are so bad that we can't even be in the same room together. One of them even committed fraud by making unauthorized charges to my bank account. Everyone I know has had awful experiences with roommates, you start out liking each other and then end up trying not to kill each other. I think as an adult you need your own space and I am prepared to pay whatever I have to to get it, so I totally understand that argument.

[peppermint.beatnik]

I wouldn't rag too much on not wanting a roommate, I personally will never under any circumstances consider having one again after the terrible experiences I've had in college. I am planning on going to school in DC and will have to budget at least $1500/month for a decent studio apartment, now I'm sure I might be able to save some money if I had a roommate but the hassle is NOT worth it for me. I have had 2 years of hell being forced to live with the people I do now, things are so bad that we can't even be in the same room together. One of them even committed fraud by making unauthorized charges to my bank account. Everyone I know has had awful experiences with roommates, you start out liking each other and then end up trying not to kill each other. I think as an adult you need your own space and I am prepared to pay whatever I have to to get it, so I totally understand that argument.

Agreed. I've had some tough times with roommates, too. At some point, it's just not worth it.

[gradschoolstinks]

Dude. Suck it up and get a roommate.

Actually, I take it back. Pile on tons of debt and dig your own grave.

You're not even attending yet and your username is gradschoolstinks? You feel entitled to a solo place... for what reason? You can't stand the thought of rooming with someone?

The negativity! It burns!

LOL! I like my username. I have a Master's degree, and let me tell you--when you're in the depths of graduate school, it can stink!

I've had some TERRIBLE experiences with roommates--mainly my last one, who burned me bad. I'm willing to work my a88 off and take on a little more debt to have my own space. Plus, I have a dog, so it'd be easier to find a place to myself where my dog can run free. That's all. No feelings of entitlement here.

Jeez. Harsh much?!!

[Postbib Yeshuist]

Dude. Suck it up and get a roommate.

Actually, I take it back. Pile on tons of debt and dig your own grave.

You're not even attending yet and your username is gradschoolstinks? You feel entitled to a solo place... for what reason? You can't stand the thought of rooming with someone?

The negativity! It burns!

Wow. Someone woke up on the wrong side of the bed. Good job on being more negative than the OP's username...

To the OP, technically, you're not supposed to use your loan to pay down credit card. That being said, you could always take a loan out for your expenses then work a job to pay down your card. There's is no way to prove you used your loan for credit card debt and your paycheck for rent, or visa versa. (Please note I'm suggesting you'll need some kind of job. Loans just aren't enough to get you through unless you count every penny).

[The_Hanged_Man]

I was under the impression that you can't take out student loans to pay for anything other than school tuition. You can't just use that money for anything you want (like rent) even if it does have to do with going to school, that's fraud.

Yeah, like the other people said you can do pretty much what you want with the money. I know people who maxed out their loans when interest rates were low and invested the money in the stock market.

The banks don't care. They have a 100% iron clad guarantee from the government and you can never discharge the loans through bankruptcy, so they are more than willing to let you loan your life away. Not a good idea perhaps, but you can do it.

[juilletmercredi]

How long are you going to be in school? If this a 5+ year program (PhD) I might be inclined to agree with you, but the loans IMO aren't worth it if you're only going to be there for 2 years. You can cut your rent in half just by rooming with someone else.

I think it also depends on where you live. In Atlanta you can get a decent one-bedroom apartment for $700-800 a month, which is less than what I pay in a share. But in New York, where I live, a decent studio can cost you $1200-1500 and a one-bedroom can range anywhere from that up to $2,000 or more per month depending on where it is. Especially if you want to live in a building that allows dogs, because most don't. I might have lived alone in Atlanta (probably not, but it would have been more feasible) but I certainly wouldn't do that in New York (or DC, or Boston, or other cities where the cost of living is extremely high). $1500/month for a one-bedroom is $18,000 per year, which will almost completely max out your loans.

I guess it depends on what it's worth to you and which one's more important. I'd rather save a good chunk of money and just room with someone (who I barely see anyway, since we're both in school and she works) than shell out for my place.

But no, it's totally legal to take out student loans to pay for living expenses, including rent to live off campus.

[gsams]

Nothing wrong with living on your own. I refuse to live with someone else after various bad roommate experiences. It will cost me less in therapy over the long run, I figure. Also, as someone who has bad allergies, living with anyone who doesn't understand how very serious spraying perfume or smoking out a bedroom window is is asking for a $400.00 ER bill easily and numerous injections. So, I prefer to live alone. This particular roommate was with me when I was in England, so thankfully - no bills. Still, it would be cheaper now just to not get a roommate where housing is friggin cheap - often cheaper in a 2 bdrm than a well-maintained 1 bdrm.

What I suggest is just to take out a loan for what you TRULY need. And get a PT job. If you aren't TA'ing like me, you have 10-20 hours a week that you can be working somewhere.

[gradschoolstinks]

Nothing wrong with living on your own. I refuse to live with someone else after various bad roommate experiences. It will cost me less in therapy over the long run, I figure. Also, as someone who has bad allergies, living with anyone who doesn't understand how very serious spraying perfume or smoking out a bedroom window is is asking for a $400.00 ER bill easily and numerous injections. So, I prefer to live alone. This particular roommate was with me when I was in England, so thankfully - no bills. Still, it would be cheaper now just to not get a roommate where housing is friggin cheap - often cheaper in a 2 bdrm than a well-maintained 1 bdrm.

What I suggest is just to take out a loan for what you TRULY need. And get a PT job. If you aren't TA'ing like me, you have 10-20 hours a week that you can be working somewhere.

Dude. Hallelujah. Well, my tuition award requires me to work on campus for 10-15 hrs a week, so I will probably end up taking out a loan AND getting a PT job outside of school. Hopefully.

Yeah, I figure less bills in therapy, too! :-)

Plus, I want to hang with my dog, and I don't want to worry about what he's getting into when I'm gone. With my stuff, I don't care, but I don't want him all up in my roommate's business, if you know what I mean.

Done deal, dude. Thanks for the advice.

[origin415]

I completely understand living on your own, if only because I've never done it (and hopefully will have an SO by the time grad school is over to mean that I never will again). Heck most of my college years I had people sleeping in the same room, 5/8 semesters (plus a summer staying in a national lab dorm). I've never had any bad experiences, but I fully intend to scrape together enough to get a tiny studio for myself.

Anyway, to the original question, that is the whole point of student loans, to pay for the things you need while attending college like an apartment. I think its a bad idea to splurge on a nice apartment, especially if you are asking if you can pay off the debt you already have! You are going to have to pay these loans back after you graduate which will limit you financially, so plan carefully and live within your means.

Edited April 2, 2010 by origin415

[gsams]

Maybe the OP is like me and finds an apartment that is clean, has walls, and kitchen without the threat of people breaking in every day as nice? IDK. I realize that when I say I want "a nice apartment", I do confuse some people. Those who know me understand my thriftyness to the point of being stingy, so they realize that I can deal with something a bit ugly as long as it is clean. Nice for me is just a quiet, relatively safe (I'm a single woman, so this is a priority), and clean place.

[someoneoutthere]

Graduate PLUS loans can be used for anything other than tuition (housing, food, books, etc.) as long as it's related to the cost of education. And I completely understand your concern about roommates; I'm planning on either renting a studio or going for on-campus housing (depending on which school I end up at) because I'd like to have a quiet place to study and sleep. I don't want to be bothered by someone who might be getting up early/going to bed quite late, having people over all the time, etc.

And being somewhere that isn't roach-infested is nice as well. I understand your concerns.

[2400]

I understand your concerns as well. When I was working on my MA, I was so concerned with pinching pennies that I shared a room in a tiny apartment and the stress it caused was not worth it. I did graduate with way less debt than most of my classmates, but having a few thousand more dollars to pay off would have been worth my mental health.

Grad school can be stressful, especially if your balancing a job, a significant other, social activities, extra curricular activities, etc. Having a relaxing place to come home to at night, and a quiet place to study can make a big difference in your grad school experience.

[julip]

Agreed! I got a lot of flak from my fellow first years (the huge majority of whom live in school housing with roommates) since I pay $300/month more than they do, to live in a wonderful studio apartment. I definitely live month-to-month, but I would not trade it for anything. The privacy and control over your own space is priceless, especially when you've come home at night from a hard day at lab. There's just a whole other dimension of stress that is added on by interaction with another person.

[intextrovert]

But in New York, where I live, a decent studio can cost you $1200-1500 and a one-bedroom can range anywhere from that up to $2,000 or more per month depending on where it is.

A studio apartment in NYC for $1200?! Certainly not in Manhattan, right? Or even Brooklyn...maybe Astoria? I paid almost that for a teeny tiny room in a 3 BR apartment in Manhattan. The cheapest studio or one-bedroom I ever heard of in Manhattan, outside of Harlem/Washington Heights, was $1800.

One of the many reasons I left...

Edited April 6, 2010 by intextrovert

[gradschoolstinks]

Agreed! I got a lot of flak from my fellow first years (the huge majority of whom live in school housing with roommates) since I pay $300/month more than they do, to live in a wonderful studio apartment. I definitely live month-to-month, but I would not trade it for anything. The privacy and control over your own space is priceless, especially when you've come home at night from a hard day at lab. There's just a whole other dimension of stress that is added on by interaction with another person.

Totally. I'm going to be balancing 4 classes/research/outside job, and a dog (is that even possible???), so it'll be nice not to have to deal with somebody else when I get home at night. On the other hand, it's nice to have someone to vent to or who you can talk with. But, I would have to find my roommates on craigslist, so it's really a crapshoot as to whether or not I'd get good ones. Who knows.

The dog factor is the biggest issue with me, only b/c I don't want to have to worry about him when I leave the apartment.

Thanks for your input!

[BionicKris]

After reading this I don't feel so bad about wanting to take out a loan myself for cost of living expenses. I've also had bad experiences with roommates, but I'm giving it another shot. I'm a social person and a cynical optimist if you can believe. I believe in people until they prove me wrong. I'm hoping and praying that God's sense of humor isn't as dark as mine and he provides me with a great roommate or two. I've been told that it is perfectly acceptable to to take out a loan for living expenses. I plan to use what I need until I get on my feet. My only question for those of you out there in Whoville is, is there any way that a federal loan will be paid directly to me instead of to the school? I'm new to this whole loan thing, so I'm a bit on edge about even going through with it. Advice on how to approach the situation would be welcome.

[ilikemoney]

It's not like they give you a Govt' Issued Credit Card and monitor your charges. Spend it on what you feel you need to be successful in school, even if it's beer. You'll be paying it back and they don't really care what the hell you spend it on.

[gradschoolstinks]

Graduate PLUS loans can be used for anything other than tuition (housing, food, books, etc.) as long as it's related to the cost of education. And I completely understand your concern about roommates; I'm planning on either renting a studio or going for on-campus housing (depending on which school I end up at) because I'd like to have a quiet place to study and sleep. I don't want to be bothered by someone who might be getting up early/going to bed quite late, having people over all the time, etc.

And being somewhere that isn't roach-infested is nice as well. I understand your concerns.

Do you know if PLUS loans are unsubsidized or subsidized? Anybody know the limit to subsidized loans for the year? My interest from my Master's degree is already accruing since I deferred for 3 yrs.

What's worse than student loans? Credit card debt! Ugh. That's a whole other story.

[modernity]

Do you know if PLUS loans are unsubsidized or subsidized? Anybody know the limit to subsidized loans for the year? My interest from my Master's degree is already accruing since I deferred for 3 yrs.

What's worse than student loans? Credit card debt! Ugh. That's a whole other story.

All of this info, in excessive detail, should be on the school's financial aid website- that's what I use when I'm trying to figure out all the details. A lot of this stuff is in flux at the moment because of the new bills that have been signed - so that's probably the best place for your info. I know this is a bit of a cop out answer....but just fyi.

On a side note - I just wanted to reiterate that you can use federal loans/plus loans/private loans to live off campus- in whatever apartment that can afford you. In fact when you fill FAFSA out, it gives you the "off campus/not with family" option to check. If they really looked down on this, it wouldn't be an option.

Credit card debt is a different story - but if you've been using your credit card to put gas in your car to get to classes, books for classes, etc. I would say this counts. I had to do this several times because sometimes I need my books and other items before my financial aid processes, and I certainly don't feel guilty using that money to pay off that debt.

I think as educated adults, you can use your judgment on what's acceptable and what's not.

Wild vodka driven weekend in Vegas to forget the frustrations you had with your thesis work that quarter? No.

Housing off campus, putting gas in your car, paying off a credit card you used for books? Yes.