How to pay for student housing & living expenses with student loans

Are you wondering, "Do my student loans cover housing?" In addition to paying for tuition and fees, student loans can be used to pay for college living expenses ... and more. Along with school meals, groceries, rent, housing supplies, and utilities, you can also use your loans to buy books, a laptop, and anything else that will make a difference in getting that perfect GPA. The first step is filling out a FAFSA. Once your application is complete, and aid is dispersed, applying for a student loan will bring you one step closer to paying for your living expenses and covering any additional costs.

Student Loan Funds: Covering Important Costs

• Tuition & fees 
• Living expenses (on or off-campus) & utilities 
• Meal plans or groceries 
• Books & supplies 
• Transportation (parking, public transportation, etc.) 
• Personal expenses 

All of these necessary expenses can be paid for with a student loan.

What to Know: Most schools estimate a budget for on-campus college living expenses, so if you’re living off-campus, you’ll need to work with your school’s financial aid office to request a cost of attendance budget that includes living expenses and a meal plan. Using student loan funds to live off campus is permitted, but you’ll need to budget to be sure you set aside the monthly payments you’ll need to cover your off-campus expenses.  

If you’re planning to live off campus: 

• Communicate with your school’s financial aid office so they can include as much aid as possible in your COA to cover those expenses. 
• Research the cost of living in the area: rent, transportation, groceries. 
• Consider how you’ll cover any unexpected expenses that may popup. Will you have work-study funds or have time for a part-time job? 

VSAC, Vermont’s nonprofit higher education agency, offers loans that can be used for off-campus living expenses, meals, and related expenses as long as your school is able to certify that they’re part of your COA.    

Using student loans to cover living expenses 

Student loans are typically disbursed directly to the school to cover tuition and fees, plus room and board if you’re living on campus. Which means you don’t usually have to do anything more to cover your bill if the total loan and aid cover your entire college costs. 

Sometimes your aid and loan exceed your COA. When this happens, you're eligible for a refund on the unused portion of funds. We recommend putting the extra money into a bank account to manage your living expenses during your college experience, or to pay down a loan if the funds aren’t needed.  

What to know: Plan for when you’ll need the funds. 

Generally, schools tell lenders when to send your loan payment. If you’re unsure about the status of your aid or loan, contact the financial aid office and ask if they have any updates. 

If you’re living off-campus, and intend to move in before the semester starts, create a financial plan for covering those initial costs before your loan funds are available. 

Other tips: 

• Budget and keep an eye on your expenses. Your loan and aid cover your costs for either a single semester or school year. If you receive a refund or extra aid, add money management 101 into your personal course load.
• Avoid unnecessary spending. College funds are an investment in your future and a fresh start on life. College should also be a learning experience on time and financial management. Student loans aren’t for: 
  • Spring break 
  • Clothes 
  • Restaurants
  • Stereo or gaming systems
• Follow the cardinal rule: Live like a student in school so you don't have to live like one for 10 years after graduation.   
• Use any excess funds to start paying down your loan. What you pay for now, you won’t pay for later. Start paying your loan to reduce the overall interest and your overall final cost of borrowing. 

How do you apply for student loans? Two steps. 

You know you can pay for college living and expenses with a student loan, but how do you get one? 

1. Fill out the FAFSA 

The first stop for any college-bound student is applying for federal student loans by filling out a FAFSA. The Free Application for Federal Student Aid determines determines which federal student loans and federal financial aid you’re eligible for.

Because federal student loans have special benefits and protections, students should always apply for and accept those funds first. And no matter what you receive initially, always compare options before applying for federal PLUS loans (for parents or grad students). 

2. Private Student Loans (like VSAC) 

So, you’ve completed your FAFSA, received your federal student loan options (along with grants and scholarships), but you still need funds to cover the remaining college costs? That’s where private student loans come into play.  

The thing to remember is that all loans aren't created equal. All private lenders have different interest rates, terms, and repayment options, so it’s important to learn how loans work, so you aren’t caught off-guard. Unlike federal student loans, private loan approval is based on the creditworthiness of you and/or your cosigner. Whenever you’re looking for a loan, you should shop around with local banks, credit unions, nonprofit state agencies for higher education (such as VSAC), and online lenders. 

Vermont students heading to school anywhere in the U.S. or internationally, as well as out-of-state students studying at a Vermont school, have access to VSAC’s student and parent loans for undergraduate and graduate/professional or trade education. For 50 years VSAC has supplied students and families with tools for informed federal and/or private loan buying. We want you to make the best choices for your life today while minimizing what you’ll pay back tomorrow. 

Two Simple Steps on Paying for College Living Expenses  

Before you sign up for a college loan, remember: 

1. Fill out a FAFSA to get as much federal aid as possible. 
2. If you still owe your school, shop around for a loan agency that fits your current and future needs. 

If you’re a Vermont resident heading to school anywhere or a student coming to college in Vermont, consider a VSAC fixed rate loan to get your college bill down to zero. 

Learn More About VSAC Student and Parent Loans