What can I use a Federal Stafford Loan for?

Federal Stafford Loans can be used to pay for education-related expenses, for those items included in the college’s published cost of attendance, often referred to as the student budget.

The Free Application for Federal Student Aid (FAFSA) includes a Statement of Educational Purpose, in which the student certifies that he or she, “will use federal and/or state student financial aid only to pay the cost of attending an institution of higher education.”

Student loan eligibility is capped at the cost of attendance, minus other aid received.

The Higher Education Act of 1965 defines the cost of attendance as including the following:

  • Tuition and fees
  • Room and board (including off-campus housing)
  • Books and supplies
  • Transportation (cost of travel to/from school, but not for purchase of a vehicle)
  • Miscellaneous personal expenses
  • Cost of rental or purchase of required equipment, materials and supplies
  • Personal Computer (if enrolled at least half-time)
  • Dependent care expenses
  • Disability-related expenses
  • Loan fees
  • Licensing and certification fees for students enrolled in programs requiring the student to obtain professional licensure or certification
  • Costs associated with a study abroad program approved for credit at the student’s home institution
  • Expenses associated with a cooperative education program

Room and board costs can include one of four allowances specified by the school:

  • Students who live on campus in housing that is owned or operated by the college
  • Students who live at home with the student’s parents
  • Students who live 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)
  • Students who live off campus

Allowances for room and board may be limited for students who are enrolled less than half-time.

These allowances are determined by the school. However, if a student can document higher costs than specified in the allowances, he or she can appeal to the school for an adjustment to the cost of attendance. For example, students should keep receipts for all their textbooks and supplies and ask the college financial aid office to increase the textbook and supplies allowance if their actual costs for textbooks are higher than estimated by the college.

Some colleges will not include certain allowances in the cost of attendance in advance, but will add them if requested and documented by the student. This may include dependent care expenses, disability-related expenses and the cost of a computer and software. Some colleges limit the purchase of a computer to just once during the educational program unless there are extenuating circumstances (e.g., 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 cost of a computer to the student’s cost of attendance. Colleges may allow an adjustment to the cost of attendance to cover the cost of required software, including operating system updates.

If any costs are covered by another source of funding, the cost of attendance will be reduced accordingly.

While a required health fee may be included in the cost of attendance, it is unclear whether health insurance can be included in the cost of attendance. Some colleges will include the cost of student health insurance in the cost of attendance, if required by the school. Others do not. Students should also ask about whether the cost of attendance may include ongoing medical expenses, such as expensive prescriptions.

Students who have special circumstances should appeal to the college for an adjustment to their cost of attendance. Note that some colleges will make an adjustment to the cost of attendance to increase aid eligibility when the student’s expected family contribution (EFC) is already zero, since the EFC cannot be reduced below zero.