-
-
This is an advertisement
-
This is an advertisement
-
-
-
This is an advertisement
-
This is an advertisement
-
This is an advertisement
-
-
This is an advertisement
-
This is an advertisement
Student Loans for Living Expenses
Even though student loans are intended to be used to pay for the cost of college, college costs often include living expenses. Meaning, student loans can be used for living expenses. But it’s important to know that your school cannot award you financial aid in excess of your cost of attendance (COA).
Can You Take Out Student Loans for Living Expenses?
Yes. You may take out student loans to cover living expenses associated with college. The amount you will be able to borrow to cover living expenses will be determined by your school’s certified cost of attendance, or COA, and may differ from school to school.
Room and board costs can include one of four allowances, depending on where you live.
- On-campus in housing that is owned or operated by the college
- At home with parents (only applies to students without dependents)
- In housing on a military base or for which a basic housing allowance (BAH) is provided (allowance restricted to board; room is excluded because it is already paid for)
- Off-campus housing
If you are enrolled less than half-time, your room and board allowances may be limited.
What is Cost of Attendance?
Essentially, COA is what it will cost to attend college. Your school will determine your COA and it includes the total cost of attending school, typically presented as the total cost for one school year. COA factors in expenses such as tuition and fees, living expenses, transportation costs, books, supplies, and more. How much you are eligible to receive in student loans is determined by your school’s cost of attendance. Cost of attendance differs by school. You may also see that your COA is referred to as your student budget.
What Can Student Loans Be Used For?
Student loans can be used for a variety of education related expenses. These include:
- Tuition
- College fees
- On-campus room and board
- Off-campus housing
- Books and supplies
- Transportation costs (bus fare, fuel, etc, but not the purchase of a new vehicle
- Cost for renting or purchasing required equipment, materials, and supplies
- Personal computer (if enrolled at least half-time)
- Dependent care expenses such as child care
- Disability-related expenses
- Loan fees
- Licensing or certification required for your program
- Reasonable costs associated with a study abroad program approved for credit at the student’s home institution
- Expenses associated with a cooperative education program
- Miscellaneous personal expenses
What You Should Not Use Student Loans For
Student loans may be used for true “living expenses.” Here are some expenses that you may not use your student loan funds for.
- Purchasing a car you do not need for school
- Down payment on a home
- Entertainment costs such as cot and movie tickets as well as streaming services
- Travel and vacation related expenses
- Home entertainment equipment such as television, surround sound, etc.
- Other debt such as credit cards
- Expensive clothing
- Dining out
- Financial investments
What Happens if I Use My Student Loans Funds Incorrectly?
If you misuse your funds you may not have enough money to cover your living expenses and other expenses throughout the semester. Remember, student loan limits are based on your cost of attendance. The money you borrow is intended to last you throughout the semester. If you spend it on non-qualifying expenses, you may come up short.
Note: If your lender does discover you are using student loan funds inappropriately, they may terminate the relationship, and you could be required to pay back the money immediately.
How Student Loans are Disbursed
Both federal and private student loans are disbursed to the school. The loan funds will be applied to any outstanding balances and the money that remains, if any, will be refunded to you by the school. Remember, this is still student loan money and should be reserved for college related expenses. It is wise to set up a checking or savings account to set aside your refund for expenses that arise later in the year.
You may also choose to give any overpayment back.
How to Increase Your Expense Allowance
Your school determines how much to allow for each expense. However, if you can document higher costs than specified in the allowances, you can appeal to your school for a possible professional judgement adjustment to the cost of attendance.
For example, you should keep receipts for all of your textbooks and supplies. If your actual costs are higher than what your school estimated, ask the financial aid office to increase the textbook and supplies allowance.
Some colleges don’t include certain allowances in the cost of attendance but will add them if you document the expenses and make a formal request.
Expenses that may fall into this category include:
- Dependent care
- Disability-related expenses
- Computer and software related expenses
Software and Computer Limits
Some colleges may limit the purchase of a computer to just once during your educational program, unless there are extenuating circumstances (for example: theft, destroyed in a natural disaster, etc.). Many colleges will want to see a paid invoice for the purchase of a computer before they will add the expense to your cost of attendance. Colleges may increase the cost of attendance to cover the cost of required software, including operating system updates.
Health Fees
Your school might include a required health fee in the cost of attendance. It may not be clear if health insurance can be included in the cost of attendance. The cost of attendance for some colleges will include the cost of student health insurance, if it’s required by the school. Others do not. You should also ask your school if the cost of attendance can include ongoing medical expenses, such as expensive prescriptions.
Special Circumstances
If you have special circumstances, you should appeal to the college for an adjustment to your cost of attendance.
How to Minimize Living Expenses
The average cost of room and board at a four year institution is more than $10,000 per year. Living at home can not only greatly reduce this cost, but reduce the amount you may need to borrow to cover your living expenses.
You could shave a lot off of your student loans by living at home. It may seem like a sacrifice to some, but with a potential savings of more than $40,000 in student loans over the course of four years. That’s a significant amount of money that you will not need to borrow. And remember, every dollar you do borrow will be charged interest.
What Not to Do
Do not borrow more money than you need to. Remember, all student loans accrue interest, and other than subsidized loans, your student loans will start accruing interest from the time of disbursement (that means you’ll be accruing interest while in school). Borrowing more than you actually need can put you deeper into student loan debt. We recommend itemizing all of you expected expenses, creating a budget, and borrowing only what you need to fill the funding gaps.
The Takeaway
While you can use student loans for living expenses, you should do your best to minimize all student loan borrowing. Create a budget to stay on track and make your money lasts you all year and you don’t borrow more than what is necessary.
Always review your federal student loans first as these come with the generous periods of deferment and forbearance and pay qualify for Income-Driven Repayment or Public Service Loan forgiveness.
If you still have gaps in your funding, private student loans are available to make ends meet. Check out our top private student loans lenders.
Best Private Parent Loans for College
- Variable Rates: 1.13% APR - 11.23% APR. Fixed Rates: 4.25% APR - 12.59% APR. Lowest rates shown include the auto debit discount.1
- Choose from multiple repayment options, including no payments while in school1
- No origination fee or prepayment penalty2
- The only undergraduate student loan that offers 4 months of Chegg® study help --a $100 value6
1This loan is for undergraduate students at participating degree-granting schools. Students who are not U.S. citizens or U.S. permanent residents must reside in the U.S., attend a participating school in the U.S., apply with a creditworthy cosigner (who must be a U.S. citizen or U.S. permanent resident) and provide an unexpired government-issued photo ID to verify their identity. Applications are subject to a requested minimum loan amount of $1,000. Current credit and other eligibility criteria apply.
Interest is charged starting when money is sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. Payments may be required during the grace/separation period depending on the repayment option selected. Variable rates may increase over the life of the loan. Advertised variable rates reflect the starting range of rates and may vary outside of that range over the life of the loan. Advertised APRs assume a $10,000 loan to a freshman with no other Sallie Mae loans.
2Although we do not charge a penalty or fee if you prepay your loan, any prepayment will be applied as outlined in your promissory note-first to Unpaid Fees and costs, then to Unpaid Interest, and then to Current Principal.
3The borrower or cosigner must enroll in auto debit through Sallie Mae to receive a 0.25 percentage point interest rate reduction benefit. This benefit applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment, if available for the loan.
4Loan amount cannot exceed the cost of attendance less financial aid received as certified by the school. Sallie Mae reserves the right to approve a lower loan amount than the school-certified amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half time.
5Only the borrower may apply for cosigner release. Borrowers who meet the age of majority in their state may apply for cosigner release by providing proof of graduation (or completion of certification program), income, and U.S. citizenship or permanent residency (if your status has changed since you applied). In the last 12 months, the borrower must be current on all Sallie Mae serviced loans (including no hardship forbearances or modified repayment programs) and have paid ahead or made 12 on-time principal and interest payments on each loan requested for release. When the cosigner release application is processed, the borrower must demonstrate the ability to assume full responsibility of the loan(s) individually, and pass a credit review that demonstrates a satisfactory credit history including but not limited to no: open bankruptcy, open foreclosure, student loan(s) in default or 90 day delinquencies in the last 24 months. Requirements are subject to change.
6This promotional benefit is provided at no cost to borrowers with new loans that first disburse prior to April 30, 2021. Borrowers who reside in, attend school in, or borrow for a student attending school in Maine are not eligible for this benefit. Chegg Tutors offers One Free session of up to 60 minutes. A session will be considered redeemed if it has a minimum duration of thirty (30) minutes. Any minutes not used within the same session will expire upon conclusion of the session. No cash value. Terms and Conditions apply. Please visit Chegg.com/studystarter/termsandconditions for complete details. This offer expires one year after issuance.
7Borrowers and cosigners who have an available FICO® Score and a Sallie Mae loan with a current balance greater than $0, may receive their score quarterly after the first disbursement of their loan. The FICO® Score provided to you is the FICO® Score 8 based on TransUnion data, and is the same score that Sallie Mae uses, along with other information, to manage your account. FICO® Scores and associated educational content are provided solely for your own non-commercial personal review, use and benefit. This benefit may change or end in the future. FICO® is a registered trademark of the Fair Isaac Corporation in the United States and other countries.
Information advertised valid as of 4/1/2021
SALLIE MAE RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS, SERVICES, AND BENEFITS AT ANY TIME WITHOUT NOTICE. CHECK SALLIEMAE.COM FOR THE MOST UP-TO-DATE PRODUCT INFORMATION.
Sallie Mae, the Sallie Mae logo, and other Sallie Mae names and logos are service marks or registered service marks of Sallie Mae Bank. All other names and logos used are the trademarks or service marks of their respective owners.
Sallie Mae loans are made by Sallie Mae Bank.
Edvisors is not the creditor for these loans and is compensated by Sallie Mae for the referral of Sallie Mae loan customers.
© 2021 Sallie Mae Bank. All rights reserved. SLM Corporation and its subsidiaries, including Sallie Mae Bank are not sponsored by or agencies of the United States of America.
- Competitive fixed and variable APRs starting at 1.04%1
- Multiple repayment options including: full principal and interest, interest-only, deferred, and flat payment
- Flexible payment terms ranging from 5, 8, 10, and 15 years2
- Coverage up to 100% of your school-certified cost of attendance ($1,000 minimum)3
- No origination, application and processing fees, no fees for early repayment
- Apply online in 3 minutes and get an instant credit decision
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
1Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
2This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
3As certified by your school and less any other financial aid you might receive. Minimum $1,000.
Information advertised valid as of 4/22/2021. Variable interest rates may increase after consummation. Lowest advertised rates require selection of full principal and interest payments with the shortest available loan term.
- Cover up to 100% of school-certified college costs. Aggregate loan limits apply.
- Get rewarded for good grades1
- Variable rates: 1.24% - 11.99% APR2 (lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments)
- Zero fees – No application fee. No origination fee. No late fees
- Apply in 15 minutes or less
1Get a cash reward on each new Discover undergraduate and graduate student loan when you earn at least a 3.0 GPA (or equivalent) in any academic period covered by the loan. Limitations Apply. Visit DiscoverStudentLoans.com/Reward for terms and conditions.
2Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments. The interest rate ranges represent the lowest and highest interest rates offered on Discover student loans, including undergraduate, graduate, health professions, law and MBA Loans. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable margin percentage. For variable interest rate loans, the 3-Month LIBOR is 0.250% as of April 1, 2021. Discover Student Loans may adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Your APR will be determined after you apply. Learn more about Discover Student Loans interest rates at DiscoverStudentLoans.com/Rates. Visit Discover.com/student-loans/help/interestonly for terms and conditions on the interest-only repayment discount.
Up to four repayment types (including no payments while in school) and multiple repayment terms help you find the loan that fits your budget
- Variable Rates: Starting variable rates range from 1.12% APR - 11.89% APR (with autopay)*, and will never exceed 13.95% (sometimes lower in certain states as required by law)
- Fixed Rates: Fixed rates range from 4.13% APR to 11.52% APR (with autopay)*
- Easy online application!
- No origination fees, late fees, and no insufficient fund fees. Period
- Up to four repayment types (including no payments while in school) and multiple repayment terms help you find the loan that fits your budget
- 0.25% discount when you set up autopay*
*Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or other eligible status and and meet SoFi's underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, evaluation of your creditworthiness, years of professional experience, income, and a variety of other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Financial Protection and Innovation under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
What to Read Next
These are advertisements.
Copyright © 2021 by Edvisors.com. All rights reserved.