It’s no secret that college is expensive, and many students need to borrow money to make ends meet while they complete their bachelor’s degree. According to the Urban Institute, up to 40 percent of students take out Federal student loans, and 70 percent of college students have some type of student debt by the time they graduate.
But what, exactly, should you use that borrowed money for?
While many students spend their student loans on tuition and fees, it’s also possible to use student loans for living expenses while you’re enrolled in school. After all, you also have to eat, sleep, buy books, and get back and forth to campus while you earn your degree, so student loans are designed to cover much more than just your tuition bill. Here’s what you need to know.
The US Department of Education asks colleges and universities to calculate their estimated Cost of Attendance (COA) so that students have a reasonable idea of what they will need to spend while they go to school. This COA is used to determine how much financial aid you may need when you fill out the Free Application for Federal Student Aid (FAFSA). The COA is also used to estimate the maximum amount of money you can borrow since you generally can’t borrow more in student loans than the total estimated Cost of Attendance at your college each year.
Here’s what gets factored into the Cost of Attendance — and therefore what your student loans can be used to cover:
The money your college charges you for tuition is covered by your student loans. Additional fees are also allowed, and these can be added on for many things, including but not limited to:
In some cases, colleges raise or add on fees more often than they raise tuition, so knowing that you can apply your student loan to fees can provide peace of mind as costs rise over time.
While in college, you need a place to live (your “room”) and food to eat (your “board”). For students who live on campus, these costs are paid directly to the college to cover the price of a dorm room and cafeteria meal plan.
For students who live off-campus, colleges estimate the cost of living in their area. This estimate provides a guide for what you’ll need to spend and the limit for what you can borrow to make sure you have food and shelter during your college years.
Colleges also do their best to estimate the annual cost of all the materials you’ll need to complete your studies. Traditionally this means textbooks, but supplies can also include an allowance for a computer and required software, textbook rental, online course access, art supplies (if required for classes), and other equipment you need for your coursework.
The costs to get to and from campus are also covered by your student loan. For some students, this could be the price of a daily commute by car or public transportation; for others, it could mean the price of a flight to a campus across the country.
These vary widely depending on the college and the individual student, but the Department of Education specifically names the following as allowable miscellaneous expenses:
When people ask what student loans can pay for, one of the biggest questions that comes up is about off-campus living. If you live in an apartment on your own or with roommates, you can use your student loan to cover rent and utilities while you’re in college. You can also use the funds to cover your grocery bills for the meals you prepare for yourself at home.
When considering a student loan for our living expenses, it’s a good idea only to borrow what you actually need. Talk to your college’s financial aid office about their Cost of Attendance, and try to use scholarships and grants first. If you still need money to live on, do your best to use your student loans to cover the necessities listed above. Your student loans will make it possible for you to live while you study, but living within your means will keep your total repayment costs manageable.
Ready to learn more about the right student loan for you? Find your best student loan today.
Comments are closed.
Recent Comment