When getting ready for college, you may think about how to pay for tuition and books needed for classes. Yet another big factor on your mind is where you will live. You may not already live near your college campus. So you should consider on how to pay for on campus and off campus costs. Learn about how to use student loans for living expenses. Financial aid may be available if you qualify.
Can You Use Student Loans for Living Expenses?
Both private lenders and federal aid organizations may allow college student to use loans to cover living costs. If you live on campus, the student loan funds are sent directly to the college. Then the college may take out the necessary amounts to pay for tuition and expenses. Any remaining funds could be a disbursement to you. The loan amount could also pay for rent when you live off campus.
The costs for living expenses and tuition typically varies based on whether you attend a public or private university. They could also vary on whether you live on campus or off campus and the state. During the 2018 to 2019 school year, students paid an average of $24,900 to public universities for the total cost of attendance (COA), according to the NCES. These costs where the same for students in on campus housing and living alone off campus during the academic year. Students paid an average of $33,200 to private for profit universities and $51,900 to private non profit universities.
With student loans, it takes away some of the worries about where you may live when attending college classes. Being careful on what you spend on living expenses could allow you to stretch your funds so that you don't wind up short.
What Living Expenses Could Student Loans Cover?
Student loans could help cover the entire costs for room and board. They may also cover costs such as utilities and transportation. Here is a full list of expenses that may be paid with student loans include:
- Housing supplies (towels, sheets, and other items)
- Furnishings such as appliances, couches, and lamps
- Groceries and meals
- Child care expenses
- Miscellaneous personal expenses
Both federal and private lenders may require students to only pay for education based expenses. Expenses that are not typically covered by student loans include:
- Down payment on a house
- Small business operating expenses
- Purchasing a new vehicle
- Paying another person's tuition or COA expenses
- Paying credit card debt
- Other debts not related to your education
How Do You Use Student Loans for Living Expenses?
The college or university financial aid office could factor in the total COA. Then the funds are sent directly to the school. They may take out their tuition and other expenses directly, including on campus housing fees. Then the remainder of the student loan could be sent to you. If you live in off campus housing, the same routine may apply except all housing funds may also be sent to you.
The financial aid officer may also adjust the COA due to rising inflation or for other outside factors. These factors may include special services due to a disability or specific health condition, such as medical supplies or a personal assistant while attending classes.
To apply for a private student loan money, create a list of lenders that provide loans to the eligible school. Then narrow down your list based on how much lending they may provide, interest rates, and repayment terms. Then you could fill out an application and provide the necessary documents requested by the private lender.
Do Federal Student Loans Cover Living Expenses?
The federal government understands that college loans could also pay for living expenses. So federal loans may cover all education based expenses including housing as well as meals. You could apply for federal subsidized student loans and unsubsidized student loans.
To apply for these loans, you may need to fill out the FAFSA. Once the form is completed, the school may use the information to determine your loan eligibility. The college could also use the information to determine the student loan amount.
Why Might You Need Student Loans?
Student loans could help defray financial costs when you may not have other financial resources. These loans may fill in the gaps when you don't have enough money to pay for the entire cost of attendance at a college or trade school. By knowing you have money available, you may focus on studying for classes as the student loan may pay for housing, food and utilities. These loans could allow you to budget your money in a smarter way.
How Do You Repay Your Student Loans?
Similar to private loans, a student loan used for college living expenses typically needs to be repaid. There will typically be a six month grace period after you graduate or leave college. This means you don't have to make loan payments and interest may not accrue. Then you could start receiving repayment information from the lender about monthly payment loan terms.
Many students find part time work to make loan repayments while attending college. You may also ask the lender about repayment options and programs that allow you to pay lower interest rates. If you receive a large loan amount but didn't use all the funds for living expenses, you may wish to send back the money to the lender. This strategy could help lower the owed loan amount instead of having the student loan refund sit in a bank account.
What Other Alternatives May Help Pay for College Living Expenses?
According to the Federal Reserve Board, national student loan debt was between $20,000 to $24,000 per student in 2018.
Scholarships and grants may also help you pay your college living expenses. These living expenses are often categorized as room and board expenses. Savings accounts are another great option to help pay for college living expenses.
You may also consider getting a part time online job if you don't already have a full time job. The types of online jobs you could be eligible for may vary based on your skills and previous experience. Some online jobs to apply for may include audio transcription, video captioning, or voice over work. Other online jobs may involve data entry, freelance writing, web development, social media management, and freelance graphic designing.