Earlier quoted context omitted.
Transportation means buss fairs not cars. 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.
Not everyone lives in areas served by a bus system... none of the paperwork I have ever seen has spelled out any of this like that... it may depend on the school you are attending. I don't know, I haven't found the law or any official statement by the Dept of Ed. on it.
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"