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What Expenses Are Covered In Education Loans in 2023?

What Expenses Are Covered In Education Loan

Financial constraints can often pose a hurdle while pursuing higher education. The average cost of education increases day by day, burdening students. Because of it, acquiring financial assistance becomes crucial for accessing quality education. Education or student loans to study abroad are designed to aid a student’s finances. Usually, the cost of attendance, commute, housing and books is provided by the financing body. However, it is essential to research these aspects in-depth before proceeding. So, what expenses are covered in education loans? Read on to find out!

What Is An Education Loan?

Before moving to the expenses covered under education loan, let us understand how it works and benefits the student. An education loan covers tuition fees and the cost of living for a student while they’re studying. It may be granted to an applicant of any programme or course from a recognised and accredited university. However, students are required to ensure their enrolment in the institute before applying for a loan. Depending on the location – domestic or international, course type, structure, duration of study and collateral- the loan amount varies.

It has several advantages over other similar forms of financial aid. Firstly, fulfilling the prerequisites of the financing body can let the student get approval for 100% of expenses throughout the study. Expenditure on accommodation and commute is often covered, too. Moreover, the interest rates and repayment schedules are usually flexible enough to complete your education and acquire adequate employment.

What Expenses Are Covered In Education Loan?

The expenses covered under education loan can vary for every financing body. They can also change depending on the student’s application, eligibility and capability of repayment. Despite that, some of the general expenses covered are elaborated below.

Cost Of Tuition

Undoubtedly the most crucial, every education loan will cover the cost of tuition. Not only does it form the majority of your loan, but you must also pay some part to confirm your admission to most institutes. Often, tuition fees are disbursed directly to the university or college’s account under the student’s name. However, if the student happens to pay beforehand on their own, reimbursement options are available for access.

Cost Of Living

The average cost of living includes expenses for accommodation, transportation, groceries, utilities and recreation. For Indian students, the cost of living changes drastically, which may lead to higher expenditure. Education loans cover these costs in most cases. However, if not, students can expect a portion of these as a monthly stipend.


Travel to and fro your university’s location isn’t typically covered under an education loan. Since the cost of tickets can be too hefty to afford, students can request their banks or financing organisations to add it to the list of expenses. Most often than not, these are approved by the bank.


Visa fees vary depending on the country you’re applying to. However, for Indian students, these are usually too expensive. Students can appeal to add these expenses to the list as well. But visa fees are often covered by private banks only. 

Health Insurance

While researching the entry requirements of universities abroad, you may have noticed that the documents for health insurance are usually mandatory. Universities demand these at admission before the students can move to the country. Hence, lenders may add expenses for health insurance, too. But, it isn’t a mandatory addition, and students may have to request their sources to enlist it.

Other Study-Related Expenses

Other than the cost of attendance and living, the university charges several smaller expenses. Fees for exams, field visits, library, parking, recreational centres, textbooks, study material, lab attendance and laptop come under this category. However, these costs often do not come under the expenses covered under education loans. Since they can gradually amount to a large sum, students must request their financing source to add them to their list of expenses. 

Important Points To Consider Before Stating Expenses For An Education Loan

After you understand what expenses are covered in education loan, it is essential to comprehend how to state them to your bank or source. Once the loan sanction process has begun, the bank won’t accept changes in your quoted amount or list of expenses. Some important points to consider before stating your expenses for an education loan are listed below –

  • The right amount – Calculate the cost of tuition, housing and living expenses accurately before stating the total amount. Since these costs can’t be increased after the loan is sanctioned, students must ensure not to quote a lesser amount.
  • Research the list of expenses – Educational institutes often provide a list of expenses students can expect to bear. They also mention the average cost of these expenses. Students can compare this list to that provided for ‘What expenses do student loans cover?’ as provided by the financing body and research on which costs won’t be covered. It gives students the leverage to plan ahead.
  • Check other options – To take care of the expenses not covered under the education loan, students can explore other options, like part-time jobs. Depending on their availability, you can adjust the amount quoted in the loan.

What Expenses Are Not Covered By An Education Loan?

Any expenditure that isn’t deemed a necessity by the bank is not covered under the education loan. It includes movie tickets, eating out, vacations, shopping or other recreational activities. In fact, the cost of tuition is the only common denominator covered by all education loans. All other expenditures of housing, commute, travel, visa, and health insurance may or may not be covered. If requested beforehand, some percentage of their total cost may be approved. Hence, students must research the terms of an education loan carefully and have multiple options prepared in order to gain funding.

Requirements For An Education Loan

Once you’ve researched what expenses are covered in education loan for abroad studies, the next step is to learn how to apply for a loan. We begin with the official necessities – the documents required for a successful application. Although the following list is small, each document is highly crucial, and the lack of it can hamper your sanctioning process a lot. Hence, compile these within the stipulated deadline and ensure they match the given standard.

  • Academic transcripts or mark sheets of 10th and 12th grade
  • Proof of scores acquired in entrance exams
  • Acceptance letter from the university on a valid letterhead
  • The official fee structure provided by the university
  • An in-depth list of housing expenses and cost of living
  • A valid passport
  • Visa documents 
  • For any additional expenses, students are required to submit detailed proof of expenditure.

Once you’ve compiled the document file, inquire about the different education loan schemes at various banks or lenders. Compare the interest rates and repayment schedules to find the one that fits you best. After this, you’ll be required to fill out an application form and submit the aforementioned file. The authorities will verify your documents and evaluate whether all the given details are accurate. Also, the collateral offered by you will be evaluated before sanctioning. Once all formalities are completed, the loan amount will be disbursed to the respective account.


When applying for an education loan, several steps must be done accurately to ensure a successful sanction. Firstly, research your options thoroughly and find the most suitable loan. Ensure that the interest rates and repayment schedules match your requirements. While tuition fees, housing, transportation, air travel and health insurance are some expenses covered under education loans, any recreational expenditures, like vacations, personal travel or movie tickets, aren’t. Hence, students should explore other finance options, like part-time jobs, internships or freelance. Many universities offer part-time jobs to students on campus. 


Q1. Can I include living expenses in the education loan?

Ans: Education loans are specifically designed for students to cover their everyday expenditures. Hence, along with tuition fees, living expenses, like the cost of accommodation, commute and groceries, are covered under the education level.

Q2. Does an education loan include travel expenses?

Ans: Education loans may sometimes cover travel expenses depending on the financing body. However, the cost of personal travel is typically not considered under an education loan.

Q3. Which expenses are not covered by an education loan?

Ans: Only the cost of tuition is guaranteed under all education loans. All other expenses may be approved if requested beforehand. However, personal travelling is not covered under the loan. 

Q4. What is the maximum amount of an education loan?

Ans: For domestic universities, students can acquire an education loan as high as INR 50,00,000, whereas, for foreign universities, the amount may go up to INR 1,00,00,000.

Q5. Can I take two education loans?

Ans: Students can take two education loans for two different programmes or courses. However, it is advisable to check with the previous lender regarding any restrictions or eligibility criteria.

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What Expenses Are Covered In Education Loan

What Expenses Are Covered In Education Loans in 2023?

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