A very common question and one that we receive quite frequently. Determining whether you can buy a car with your student loan or grant funds is pretty straightforward. First and foremost it is important to understand that Student loans are to be used for covering the cost of your education, books, food, housing and finally transportation. Quite often students will find that they have additional funds left over and are in a quandary on how to put it to best use.
As explained above, your student loan funds are to be primarily used to fund your college tuition, pay for your room and board. It is advisable to use any funds left over for education and living expenses. Education expenses could include books, a computer, a laptop, lab supplies and of course school supplies.
Living expenses could include paying rent and used for traveling back and forth to your school or college campus. In some cases additional fund are included in the student loan itself to cater for these expenses. If you live far enough from your college campus then using the leftover funds to buy a car to help you to travel to school or college campus can be acceptable.
The key caveat to remember is that you spend the student loan funds first on your education and any surplus funds can then be used to help you fund your living educational and certain living expenses.
So yes, you could use your leftover student loan or grant funds to buy a car provided
- The bulk of your student loan or grant funds have been used for to fund your education
- The left over funds from your student loan or grants allow you to buy a car for the primary purpose of commuting to your school campus
Below is an example question on this topic.
I am going to go to online college. So I don’t need a car for that reason. But I do need a car to go get printer paper and school supplies whenever I need them. I would also like a car for reasons that are off the college subject. I have a son, and I need a car to take him to doctors appointments etc.
So can I use my federal pell grant or student loan to buy a car? I need a car to go buy a laptop, printer paper, and other school supplies. I live in California, and applied at the University of Phoenix online college.
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