In most countries though, loans are given by a bank for a specific purpose and not allowed to be used for other purposes. Now money is fungible though, so if you had enough money to not need a student loan, and you took the education loan anyway and then used it for education, and spent money you had anyway which you would have used for education but now you invest it, that’s all cool.

Edit - I realised I typed this very badly. What I meant was, say you had 10,000 BSD in your bank account, and took a student loan of 5,000 BSD, you now have 15,000 BSD. Now if you pay 5,000 BSD for college, whether it came from the original 10k or the loaned 5k, it doesn’t matter. And you could have paid the college from your original money and invested the 5k from the loaned money and it’s all the same since it’s from your fungible pool of 15k.

I guess that's a fair point. However, I do think there should be some limitations. There's limited money, and the governments job should be to spend it in ways that create the best outcomes (if it's a good government working for the people). If they're throwing it away in ways that aren't beneficial then there's an opportunity cost where it could be better spent on something else.

As for if it's legal, I have no idea on how your government works, but the government creates the laws, including the one providing the loans, so they could presumably create a law saying a certain portion must be spent on certain things (transportation, school materials, classes, etc.).