How to Use Student Loans for Living Expenses in a Smart Way
As a rule, the story starts with how excited they are to get into a college. In the end, a remarkable number of them had to resort to loans for school to pay for the college.
With 20 million people that attend college in the United States, about 60% borrow money to help pay the tab, according to the Chronicle of Higher Education.
Say, you are a first-year student and wonder, ‘How much student loan can I get?’, find out the amount of your loan for school right now.
Student Loans Limit
So, as a matter of fact, government school loans should be your first choice when considering your borrowing options for paying the tab. But, unfortunately, they are not available for international students. Though, you may research the Internet and find good companies offering student loans for international students.
Indeed, the amount of government student loan depends on your year in school, your status as a dependent or independent student, and the type of loan for sure. With this in mind, if you’re an undergraduate expect to get up to $12,500 annually and $57,500 total, while graduate students have a chance to get up to $20,500 annually and $138,500 total.
Yet, in case the government loans don’t cover a student’s full financial need, private loans can come into play. To make things clear, with 45 million people in the US carrying student debt, private lenders currently hold less than 10%.
It’s not always the case though they typically offer higher borrowing limits than the government loans. Yet, the amount you borrow can’t exceed your school total cost of attendance.
if you’re an undergraduate expect to get up to $12,500 annually and $57,500 total, while graduate students have a chance to get up to $20,500 annually and $138,500 total.
When selecting a lender, it’s important to review the terms or contact the lender directly with your questions. Besides, every lender’s range varies, so it makes sense to explore the interest rate and repayment terms.
How to Get Loans for College?
Once you determined to get loans for college, learn all borrowing options you have. Do not forget, with both government and private student loans, you will have to pay back the money you borrow plus interest.
Before you get started, make sure you compile the necessary financial information:
- your income;
- credit history;
- necessary eligibility factors.
This process takes time. Once you’re approved for a school loan, check whether the lenders’ offerings match your requirements.
Keep in mind that each student has unique funding needs. So, no single lender can be all things to all students. Remember that each lender is different when it comes to your student loans.
Some lenders might send your loan money directly to the school and then only the latter sends you a check. While others might send the loan money directly to you. So, make sure you know where your money is going.
Anyway, once you apply for a student loan, the loan amount might exceed your expectations to cover your expenses. Yet, you might not accept the entire loan offered and can simply request a lower needed amount. The truth is that no matter how good the terms for a loan are, it’s always cheaper to not borrow money in the first place.
What Can Student Loans Be Used for?
With the loan money in your bank account, it can be rather tempting to squander the money on other things, like a shopping spree. Indeed, you’ve heard stories about students who have frittered away their student loans on impulse buys like trips, smartphones or stereos. They have no idea how to pay this back.
Before you even think about it, think carefully about how long it will take you to repay that money. Think of the main squander – YOU.
Take care of poor spending habits which can hurt your bottom line. No matter what your interests are, try to avoid paying for car repairing, travel, clothes, eating out or down payments that do not relate to your education.
So, it makes sense to keep your student loan money in a separate bank account with no immediate access. Remember that the more you use your student loan for non-education expenses, the longer you’ll be paying them back. With the main goal to help pay the tab, use them as little as possible.
If spent unwisely, chances are you’ll be kicking yourself for years after graduation when you have to pay that money back plus interest.
Can I Spend Student Loans for Living Expenses?
Face it, if you want to apply for a student loan, it makes sense to understand what the money covers and how payments are made. The truth is that student loans cover not only the cost of college but also other expenses directly associated with college attendance. It includes:
- activity fees;
- room and board;
- library fees;
- parking permits;
- other fees covering the use of on-campus technology.
It’s important to consider all options, especially when it comes to student loans for housing. You may wonder ‘Does financial aid pay off-campus housing?’
The average student housing costs may vary from $9,988 at Florida State University up to $15,951 at Harvard.
Well, according to the US Department of Education, the larger provider of grants for college students ensures that students may use government aid funds to pay for their off-campus housing expenses.
It’s better if you know ahead of time that you plan on living off-campus. Make sure you include this on your student aid form, as students who live off-campus tend to receive slightly more financial aid.
In cases where you risk losing your housing or struggling to pay the bills, you are far from alone. As college costs continue to rise, a particular number of organizations and programs can give students a helping hand. Consider applying for different programs that help pay rent for college students to keep your head above water.
Well, using too much of your student loans for housing and living expenses could leave you short for the tuition bill.
Do yourself a favor, take advantage of grants for living expenses while in college. Indeed, it’s not a piece of cake, yet it’s a safe bet for needy college students. Don’t shy away from grants and scholarships. As simple as it sounds, the money you earn does not require repayment.
Of course, it makes sense to find ways to save with more affordable housing options. While when used responsibly, student loans can help make a successful investment in your future. And remember that you can begin returning your student loan debt when you’re still in college.
To top it all off, it’s in your interest to spend your loans for school wisely. Face it, the more you sacrifice now, the better you’ll set yourself up for the future. Find your best loan for school today.