If a student's financial aid package, including grants and loans, amounts to more than his billable expenses, including tuition and fees, he receives a refund from the school to cover living expenses, according to U.S. News and World Report. Some students who live off campus qualify for larger loans than those who live in dorms.Continue Reading
The first step in qualifying for financial aid is the completion of the Free Application for Federal Student Aid. The FAFSA is the application for government grants that the student does not have to pay back and loans that the government expects the student to pay after graduation.
Federal Stafford loans are available to both undergraduate and graduate students. They have fixed interest rates and are the most common student loans. Acceptable use includes tuition and other school expenses. Subsidized Stafford loans are only available to undergraduates as of 2015, but graduate, professional and undergraduate students can qualify for unsubsidized Stafford loans.
For students whose needs go beyond the Stafford loan, options include the Parent Loan for Undergraduate Students and the Perkins loan. The PLUS loan is not need-based, but the parent's credit rating may affect its availability. The Perkins loan is need-based.
Students who choose to use loans for their living expenses while in college should realize the master promissory note they sign requires that they repay the loans. Other options such as on-campus jobs help to reduce the cost of the student's education.Learn more about Credit & Lending