Living on Campus Can Cost You Thousands—Is It Worth the Mountain of Student Loan Debt?

Even if you have enough funding to cover your college tuition, housing can still be an obstacle. Scholarships, grants, and other forms of financial aid that you don’t have to repay are often insufficient to cover both your tuition and other essential costs, including room and board. You have the option of take out a student loan to pay those bills, but the long-term costs of taking on additional debt may warrant looking at other options.

What Student Loans Can Be Used For

Federal student loans come in two major types: direct subsidized student loans (for undergraduates with financial need) and direct unsubsidized loans (for undergraduates and graduate students regardless of financial need). Both can be used for anything that’s listed in your college’s published cost of attendance (COA). That includes tuition and fees, food and housing, books and other course materials, transportation, and certain miscellaneous expenses.

However, these loans also have limits, which vary based on your year in school, whether you’re someone’s dependent, and whether you have a parent who qualifies for a PLUS loan. For example, a first-year undergraduate who’s a dependent and whose parent would qualify for a PLUS loan can borrow up to $5,500 in total, of which no more than $3,500 can be in the form of a subsidized loan. Their total loan limit for four years would be $31,000.

Private lenders, including banks and credit unions, may offer student loans with higher limits. In general, private loans are less desirable than federal ones because they often have higher interest rates and less flexible repayment options.

Considerations When Using Loans for Dorm Costs

A student loan can take some of the pressure off when it comes to covering your housing costs. You might not have to get a job (or work as many hours at one) to be able to afford rent, giving you more time to focus on your studies and other endeavors.

Additionally, after graduating, you may be able to eventually get some or all of your federal student debt forgiven after a specific amount of time has passed or you’ve made a sufficient number of qualifying monthly payments while working in certain fields. Of course, the major downside of taking on debt is that if it isn’t forgiven, you’ll have to pay it back with interest.

While federal student loans have relatively low interest rates compared to private loans, that interest can still add up over time. The average outstanding federal student loan debt per borrower was $39,075.29 in Q2’25, and according to Saving for College, it took 21 years on average for borrowers to repay their student loans in 2023. Meanwhile, depending on the type of school and degree, the average cost of room and board varied between $10,390 and $17,540 in 2024–2025.

The burden of loan debt can also cost you in other ways, such as restricting your career choices or forcing you to delay major life goals, such as marriage or buying a home.

Alternatives to Borrowing

If you’d rather not borrow—or borrow as little as possible—there are a few alternatives worth considering:

• Apply for additional grants and scholarships. The College Board has an online scholarship directory that you can take advantage of.
• Get a part-time job or apply for a work-study program.
• Become a resident assistant (RA), as these positions often come with free or at least discounted housing.
• Stay with your parent(s) or guardian(s) if their home is close enough to campus and they’re willing to house you, but be sure to consider commuting costs.

The Bottom Line

Sometimes borrowing is your best (or only) option for paying college housing costs. That said, it’s still worth knowing what it will cost you in the long run so you can borrow only as much money as you really need.