Using Student Loans to Travel: What You Need to Know

students studying together

Can you use student loans for anything? Say…traveling? We’ve got the inside scoop for you on using student loans for travel! ☆ Travel abroad is an experience like no other, especially when you travel meaningfully. There is nothing like setting foot in a faraway land, learning a new language, discovering a new culture, and becoming a part of a community through work, study, volunteering, or insightful travel. It can be eye-opening, life-altering, and—who are we kidding—expensive.

man with backpack staring up at the sky
Hey man, don’t worry! If you’re determined to go abroad, you CAN make it happen. 

Recent trends have shown that students have been testing a loophole to make overseas travel possible, despite the expense. That’s right, they’re using student loans to travel! Now you may be thinking, can you use student loans for anything? Well, the answer is no. The student loan process can be tricky, with a lot of fine print involved on how to use your financial aid. But the good news is that there are ways to travel the world, even if your education has put you in debt (hey, join the club!).

Here you’ll find everything you need to know about using student loans for travel abroad!

Using student loans for travel FAQ

While it’s possible to use student loans for travel (we know you’re thinking of ways to fund spring break in Cancun!), it’s not always the smartest option. Unless your travel is directly linked to your education, using student loans to travel could have a negative impact on your future. 

Keep reading for the pros, cons, and popular questions about using student loans for travel abroad.

1. How do student loans work?

If you’ve ever taken out student loans for university, the tuition and fees are normally paid directly to your school. Students then receive a loan refund to cover living costs. Think food, clothes, possibly even a car to commute to classes. Now you can spend as much or as little as you want on your living expenses, and this is where students often find a loophole.

Instead of spending money on basic living needs, students are skimping on modern comforts and using the money to travel instead. Is this allowed? Can you use student loans for anything? Is it possible for travel to take precedence over the comfort of living and use student loans for travel abroad?

girl with backpack smiling in front of art structure
Having a million questions (and then some) about using student loans to travel is normal.

2. Am I allowed to use student loans for travel?

Let’s get down to it: legally, student loans must be used for education expenses, including tuition, education fees, books, supplies, and general costs of living while studying. While it’s possible to face prosecution for illegal borrowing, financial aid offices don’t typically track how students spend their money. Students are finding if they misuse their student loans, there are usually no consequences in the immediate future, and more students are using student loans to travel than ever before.

The question is: Do you really want to enter this gray area and put yourself into further debt just to party with your friends on a tropical island? Why not travel in an educational way?

[Need Money to Study Abroad? Ask Your Network]

3. Can I use student loans to study abroad?

Yes! If you want to use your student loans ethically to travel, study abroad is the way to go. While the process can be complicated and intimidating, it is a solution that allows students all over the US to study abroad. Using student loans to travel abroad for your studies makes it possible to see more of the world without cheating the system. 

In order to receive a study abroad financial loan, you have to be enrolled in and able to receive credit at an approved university. Generally, this comes in the form of a federally-funded loan for Americans studying abroad. Don’t forget to double check if your school accepts these loans! If they do, not only will this allow you to use student loans for travel abroad, but you’ll likely save money with the lower cost of international schools.

4. What will study abroad loans cover?

Study abroad loans cover the same costs that a normal student loan covers: tuition, fees, course supplies, and living expenses. While you can spend your loan freely while abroad, the main goal is not to use student loans for travel splurges. In reality, you want to use them only for what you absolutely cannot afford, as you’ll be paying off high interest rates when you return home.

Instead, come up with a game plan to reduce your spending, and try to find a part-time job before you leave or while abroad to cover non-educational expenses. You don’t want to travel thousands of miles away from home just to sit in a classroom—you need some spending money to explore!

5. Is it a good idea to use student loans for travel abroad?

While using student loans for travel abroad is possible, there are many factors to consider before taking out student loans for travel abroad. Whose name is on your loans? If your parents co-sign a loan, you could be putting them further into debt by taking out a student loan for travel. Even if it’s just in your name, high interest rates mean you’ll be paying off debt for years to come.

What are your travel intentions? Most financial aid is handed out on a first-come first-serve basis, so if you use student loans for travel abroad, it means another student may not receive the financial aid they need to study. So are you using that loan for fun, or for educational purposes? While you may not get caught using student loans for an epic trip to Mexico, it’s not always the best idea.

girl with backpack throwing up a peace sign
If you don’t want to use student loans for travel, then it’s time to get creative and consider other options.

Other ideas for funding your travel

Using student loans to travel may be your route if you intend to study abroad, but this is not the only option to fund overseas travel. There are plenty of other ways to fund your travel that won’t set you back in debt.

1. Create a FundMyTravel campaign

Are you planning to travel meaningfully? Do you want to travel abroad in order to learn, invest in your future, further your career, or make a difference in a community abroad? Create a FundMyTravel campaign to fundraise for your travel, instead of using student loans to travel.

Whether it’s family, friends, or strangers, most people are happy to donate to a good cause. Create your campaign and tell a compelling story. Inspire those around you. If you reach out to those who can resonate, you are bound to raise funds to jumpstart your travels abroad.

[How to Write a Fundraising Story + 7 Compelling Examples]

2. Apply for scholarships

Scholarships are available for all kinds of meaningful travel abroad, from studying to interning abroad. This is another great way to fund your trip instead of using student loans to travel. Scholarships are a different source of financial aid, offering full or partial funds to cover your tuition fees for travel abroad programs. Scholarships are much better to use than student loans for travel, as you won’t have to worry about paying back loads of debt when you return home.

3. Work while abroad

Yes, traveling abroad is expensive, but if you can find a way to travel and make some money, you’ll hit the jackpot. Instead of using student loans to travel abroad, consider waiting until you graduate to embark on a working holiday in Australia or New Zealand, or teach your way through Asia. You’ll see more of the world while making money to cover your travel expenses and pay off your outstanding debt at home. Simply make a budget that includes monthly loan costs, and you could come home debt-free!

Plus, you don’t even have to wait until your debt is paid off to travel. Student loans can often be deferred for meaningful travel abroad programs, so you aren’t tied to home to pay off your loans. Worst case scenario: work on the road and seize every opportunity for side gigs!

Using student loans to travel isn’t your only option!

woman staring at computer screen biting pencil
We get it—student loans are STRESSFUL. The good news is that they’re not your only option for going abroad.

Still wondering, can you use student loans for anything? There are gray areas, of course, but you should be using your student loans wisely.

There are so many ways to see the world without going into debt. Of course, while it’s always an option using student loans to travel for study abroad, it’s not always the best option. Consider every factor, and if you can find a way to travel debt-free, take that opportunity instead.

Bottom line: you can always travel abroad—you just need to get creative!

[Create a Campaign on FundMyTravel and Get Going on Your Meaningful Trip!]

liz gorgaThis article was written by Liz Gorga. Liz is an international traveler, writer, and educator with two home bases: the USA and Australia. She has worked, studied, interned, volunteered, and traveled through more than twenty countries (and counting), and currently resides in sunny Brisbane, Australia. Her life goal is to experience the magic that exists in every inch of the earth, whether she’s hiking in the Himalayan foothills, jumping out of the sky over coral reefs, or devouring a heaping bowl of homemade pasta.

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