You can use a to pay for rent for off- during . In fact, you can use to cover a ‘s full cost of attendance, also known as the budget.
Cost of Attendance
A cost of attendance (COA) includes room and board in addition to and fees, books, supplies and equipment, transportation and miscellaneous expenses.‘s
Most colleges have four budgets based on where the lives:
- On in the dormitories or other owned or operated housing.
- , such as an apartment.
- At home with parents.
- On a military base or receiving a basic housing allowance from the military. (In this case, the budget will include costs for meals but not for housing).
There may also be other budgets for students who are married or have dependents.
You can use loans to pay for the cost of the apartment and , up to the allowance specified by the .There are no restrictions on where the apartment is located, and the apartment does not need to be near the .
How Loans are Disbursed
are sent to the , not to the .
The and fees. If the is living in the dorms or other housing, the will also be applied to room and board. will apply the and other first to
If a credit balance remains, it will be “refunded” to the within 14 days. The can use this to pay for rent, textbooks and other costs.
Since the will be paid to you in a lump sum, you will have to manage the carefully to have enough available to pay your off-campus rent each month.
Some colleges have “Pell as a paycheck” programs where a Pell grant recipient gives them permission to hold onto the and they disburse it in monthly or biweekly installments. But, you may be better off depositing the to a bank account so you can control the timing of the rent checks.
Submit the FAFSA Every Year
To receive a , you should complete and file the Free Application for (FAFSA) the moment you commit to go to your senior year of high school. This is the application that allows the federal government to consider your case, and includes details like your parent’s economic background, your dependency status, and your academic and extra-curricular achievements. The federal government also considers inputs from your school, to determine the final amount that you qualify for during that .
This means that federal loans are decided for the entire , and need to be renewed on a yearly basis. This may also be accompanied by qualifying criteria to maintain your eligibility for the . (This typically includes enrolling for at least half-time classes each semester, maintaining a required GPA, etc.)
If you exhaust your limits, you may consider borrowing a . Federal loans (from the government) are preferred over a (from banks and private lenders) because they come with many perks, including:
- Potential for subsidized loans
- Potential for forgiveness
- Options to make payments based on your income and family size
- Options to pause payments if you lose your job or have an economic hardship
- Generally have a lower interest rate
If you do wish to borrow private student loans, shop around to find the best lender for you .
How to Return Unused
It’s important to keep your with a low interest rate it will still need to be paid in full once you leave school. But, sometimes it can be difficult to predict how much you’ll need to borrow. to a minimum. Even if you have a subsidized
For instance, consider that you were able to minimize your expenses mid-way through a semester, perhaps by taking on a roommate, or by picking up a job that includes meals. In this case, you may end up with leftover . Rather than use it on non-urgent expenses, consider returning your unused loans back to the government. If this is done within 120 days, you will not incur interest for the corresponding amount.
Things to Consider When Paying for Off-
Living off in an apartment can be a great way to save on room and board, especially if you get a roommate to split the rent. But, it can also increase costs if you need to commute to school.
Using loans must be repaid, usually with interest. Every dollar you borrow will cost you two dollars by the time you repay the debt. to pay the rent will also increase your costs, since
You may be able to reduce costs by living on- in a dorm. For example, some colleges offer an opportunity for students to be a Resident Assistant, which can come with free or discounted housing.
Dorm life is also more convenient. A typical dorm comes furnished with a bed and desk (perhaps even a wardrobe), and includes basic utilities like electricity, water, heating, internet, etc. This works out much cheaper than off- living, as you total up expenses related to rent plus deposit, furniture, and monthly utilities.
Also, an increasing number of schools provide three daily meals for on- students. The cost of these meals are factored into the COA, which means that the school will automatically deduct it from your .