Because no-one expects you to be sensible with your cash at uni.
There are certain rights of passage that every student goes through, including drinking your own bodyweight in alcohol, shagging around like a dog on heat and writing assignments at 3am on a caffeine high having done little to no research.
One of the joys of student life though, is being able to blow your student loan on whatever you like - happy in the knowledge that you will be able to live on a subsistence of toast and bargain value pizza from the supermarket while your "living expenses" are spent on more important items. Here are few you might want to consider:
The staple of any good student diet - beer not only tastes good, it also has a high calorific content, which means it will sustain you in the absence of lots of food. A bottle of Budweiser, for example, contains 145 calories and 10.6 grams of carbohydrates. Beer is also proven to make you more attractive to the opposite sex - what more do you need?
Let's face it - work is very much a secondary consideration when you are at uni, which means there is going to be a lot of free time doing not much. As a student you will be spending an extraordinary amount of time, sitting around, watching TV, and discussing the merits of how Carrie Fisher would have fared in Dancing with the Stars if the show had been around in 1983 and she could have worn the Princess Leia slave outfit. Treat yourself to a massive TV. It will be money well spent given the amount of time you will use it.
Epic Games Console
See above. With very little filling your time, video games entertainment is an essential of the student pad. Everyone has their personal preference between Xbox, PS3 and Wii, but as you almost certainly own one console already, this is the time to splash out on an alternative. Twice the consoles, twice the fun. Perfectly logical really.
Always wanted a mint condition original Optimus Prime figure but could never afford it? Now's your chance! Student loans are there to be spent on outrageous purchases, so why not go for something that will not satisfy your childhood dreams but also be a sound financial investment for the future?
When you're not drinking beer, you're going to be knocking back a lot of coffee. An espresso machine is an extravagance, but given how much you would spend in Starbucks over the course of your uni career, it will probably work out cheaper to get a decent coffee maker yourself. Also ideal for those all-night cramming sessions.