Can I use my student loans to pay for off-campus housing?

Question

Can I use my student loans to pay for off-campus housing?

Answer

Student loans can be used to pay for costs included in the college’s published Cost of Attendance (COA). Generally, a COA will include costs beyond tuition and fees, such as room and board. Most colleges and universities have three student budgets to determine a student’s COA, one for students who live on campus in college-owned or operated housing, one for students who live off-campus and one for students who live at home with their parents or relatives. Housing expenses are excluded for students who live on a military base or who receive a basic allowance for housing.

If you’re living off-campus, your school’s room and board will likely be based on the “reasonable expense” amount for the area. A few things to consider:

If you are eligible to receive financial aid funds back from the school (if the amount of aid you are awarded exceeds the direct costs to your school), those funds will be needed to cover all of your indirect costs (things you need to attend school, but are not directly paid to the school). In addition to your off-campus housing, that could include books, supplies, transportation, etc. You need to make sure you have enough to go around for everything you will need.

If you are using student loan funds, you want to be a bit careful. When you are borrowing money, you will need to pay back your loan, plus any interest which has accrued. Interest is the cost of borrowing money. And over time, if you aren’t making any payments, interest can add quite a bit to your loan balance.

If you have any additional questions, it would be best to discuss your specific situation with your financial aid office.