Please stop repeating this myth. It is, in fact, possible to discharge student loans in bankruptcy. (It is particularly difficult to do so compared to other forms of debt, but there is an enormous difference between that and "you can never declare bankruptcy on them.")
See, e.g., http://www.studentloanborrowerassistance.org/bankruptcy/
Students are offering up zero collateral and usually have minimal credit history for a loan in the tens of thousands of dollars. For better or worse, if students could default on their student loans, fewer banks could/would make those loans.
Highlights include
> Transportation (cost of travel to/from school, but not for purchase of a vehicle)
> Room and board costs can include one of four allowances, depending on where you live:
> On-campus in housing that is owned or operated by the college > At home with parents (only applies to students without dependents) > In housing on a military base or for which a basic housing allowance (BAH) is provided (allowance restricted to board; room is excluded because it is already paid for) > Off-campus
No "Durable" goods like houses or cars may be bought with student loan money in the US.
"You may use the money you receive only to pay for education expenses at the school that awarded your loan. Education expenses include such school charges as tuition, room and board, fees, books, supplies, equipment, dependent child care expenses, transportation, and rental or purchase of a personal computer"
(see https://studentaid.ed.gov/sa/sites/default/files/your-federa...)
It would be interesting to find an official statement on this... I couldn't find anything on the Dept. of Ed website and my search for the actual laws didn't turn up anything...
I was given paperwork when I got my undergrad student loans, and it was very clearly spelled out.
If the loans are private, I am not 100% if all of the same rules apply.
Totally not related to the discussion. The rule does not say "If you live in a place served by busses, you cannot buy a car with student loan money"
Um no. They can't. That's the problem with American student loans. It's the only contract you can enter into under 18 and you can never declare bankruptcy on them. It's the most bullshit type of loan there is.
In grad school I put part of my car on Student Loans because it was 0%. My car load was 5.2%. After I graduated, my student loans shot up to 6.8%! I quickly dumped all my savings onto them and squashed them in three months. Even if I hadn't been able to to that, I probably had the credit to get a cash loan for under that and pay them off. Most students don't have that option.