Student Loans For Housing And Living Expenses

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Learn how to use student loans to pay for education-related living expenses, such as transportation and off-campus housing. (Blind)

Student Loans For Housing And Living Expenses

Student Loans For Housing And Living Expenses

Student loans aren’t just for college or textbooks. In fact, you can also use it to cover other college-related expenses, such as food, housing, and other general living expenses.

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While lenders don’t make loans specifically for student living expenses, traditional student loans can help pay for college expenses other than tuition. Here’s what you need to know about using student loans to pay for education-related living expenses.

If federal student loans aren’t enough to cover all of your expenses, you may want to consider private student loans. With Kredibel, you can easily compare personal student loan rates from different lenders.

You should always look for grants and scholarships before turning to student loans. Federal student loans, issued by the US Department of Education, should be your first choice of borrower. These loans offer lower interest rates, flexible payment options, do not require a cosigner, and are not based on credit history or scores.

To apply for federal student loans, as well as federal grants and work-study programs, you must complete the Free Application for Federal Student Aid (FAFSA) and provide tax returns, W-2 forms, and other financial documentation. If your parents include you as a dependent on your tax return, you must also provide that information.

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After the Department of Education processes your application, it will send you a letter indicating your expected family contribution, which helps determine your eligibility for federal financial aid. You will then receive a letter from the school with details on the type and amount of federal aid you are eligible for. If you need more than what is provided, private student loans (provided by private lenders) can fill the gap. Note that you need a cosigner to qualify, as eligibility is based on credit history.

For federal and private student loans, lenders will disburse funds directly to the school to pay for tuition, room, board, and other legal expenses. If there are funds left after payment, your school can pay the excess amount immediately.

You can use this extra money to pay for living expenses, as long as the expenses are related to your education.

Student Loans For Housing And Living Expenses

The Office of Federal Student Aid says that student loan funds can be used for “qualified educational expenses,” and only for those incurred while in school where you are considered eligible for financial aid.

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Legal education costs, of course, include tuition and room and board (on-campus or off-campus housing). But it can also include:

Since “support” is a legitimate expense, you can also use student loan funds for food, but only within reason. For example, a $100 dinner at a steakhouse would not qualify, but a lunch at a campus cafeteria would.

If you need a private student loan because your federal aid doesn’t cover all the costs, you can easily compare private student loan rates from different lenders with Credible.

You should not use your student loan funds for anything unrelated to your education. Misrepresenting your debt can get you into legal trouble, or you may have to pay it back if your lender finds out (more on this later).

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Although there is no official list of student loan defaults, you can generally expect lenders to consider the following fees:

If you’re not sure whether or not a fee is eligible, contact your student loan service or your school’s financial aid department. They will be able to tell you with confidence what is eligible and not eligible for loan coverage.

When you apply for a student loan, you must sign a promissory note, essentially a contract that explains the terms of your agreement. Using the loan funds for unapproved expenses will put you in breach of the terms, and your lender may take action.

Student Loans For Housing And Living Expenses

With federal student loans, for example, you will be required to pay back your entire loan if the Department of Education learns of the misappropriation of funds. With private student loans, the consequences will depend on your lender, but you could face legal action.

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Student loans aren’t your only option if you need help covering your living expenses. Before using a loan, consider one of the following alternatives.

Scholarships can be a great way to offset some of the cost of college without going back into debt. Schools, government agencies, non-profit organizations, and private companies offer scholarships.

Your college’s financial aid office is a good place to start looking for scholarships, or if you’re still in high school, your guidance counselor can help you as well. You can also use the Department of Labor’s scholarship search tool.

You can also apply for work-study positions, which are jobs on and off campus designed to at least cover the cost of your education.

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Federal work study programs are one type of federal aid available to you. Your school also has other options. Sometimes universities partner with local businesses to create work-study programs just for certain areas of study. Again, the financial aid office is a good place to start your search.

You can also apply for part-time jobs at restaurants, shops, and businesses near your school. Make sure the hours fit into your class schedule and you still have time to study. You should also make sure you have adequate transportation to get to and from work, or find things within walking distance.

Minimizing your expenses is key if you’re struggling to cover your general living expenses. Try to find areas where you can cut back on spending to help. This might mean renting textbooks instead of buying them, forgoing music or TV subscription services for a while, or taking the bus instead of buying gas.

Student Loans For Housing And Living Expenses

Student loans can help you pay for school-related expenses, but you still have debt and accrue interest. To ensure you minimize these additional costs, it is important that you only borrow what is absolutely necessary.

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If you have money left over that you can’t or don’t need to spend, try using it to make extra payments on your debt. This will reduce your principal balance and interest charges over time. It can also help you pay off your student loans faster.

If you decide that a private student loan is right for you, Credible makes it easy to compare options from different lenders. This is 100% free and will not affect your credit. After deducting tuition and room and board from your student loans, you can use the remaining amount for eligible living expenses, as they are generally part of your total certified cost of attendance. Some expenses include housing, rent, books and supplies, transportation, and groceries.

Each university calculates the cost of attendance for different types of students each year and that is the maximum number of students that can borrow that year. The total cost of attendance generally includes tuition, housing, rent, room and board, books and supplies, and transportation. Necessary personal expenses, such as groceries and toiletries, are usually also accounted for and covered by most student loans.

When you apply for a student loan, the amount is transferred directly to your university, which reduces tuition and room and board costs for students on campus. The remaining funds are generally distributed to students, which can be used to cover school-certified living expenses.

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A student’s eligible federal aid equals financial need, which is the cost of tuition (COA) minus the family contribution (EFC). The government also considers the cost of living for students when calculating financial need.

Along with tuition, living expenses included in the student’s total COA calculation are room and board, off-campus student housing and rent, travel, books and supplies, child care, and miscellaneous personal expenses. From the total, your EFC is subtracted, which may include factors such as income, parental income, family size, and related demographic factors.

However, the assistance you receive may be less than your calculated financial need and may not be sufficient to cover all certified living expenses included in the COA calculation. In such cases, you can take the help of grants and scholarships to bridge the funding gap. After exhausting all federal and other options, if you need it, you can take out a private student loan to pay for school-certified expenses that you couldn’t cover with the aid you previously received.

Student Loans For Housing And Living Expenses

Your lender can’t investigate what you’re using the money for, but if they do and find that you’ve misused the funds, your loan can be cancelled. You may need to immediately return anything you have used. In addition, the lender can foreclose on you

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