How to pay for housing & living expenses with student loans

Written by
Emily Stetson

August 5, 2022


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Did you know that student loans may be used to cover not only your tuition and fees, but also living expenses including meals, groceries, rent, housing supplies, and utilities? You can use your loans to pay for books, a computer and related equipment for your studies, too.

What can you pay for with a student loan?

When you apply for a student loan, the lender determines how much money you are eligible to receive at a particular college based on your school’s cost of attendance, often referred to as the COA, and any other financial aid you have received. The COA is an official number determined by each college, depending on that institution’s costs. It typically includes:

  • tuition & fees
  • housing (on or off-campus) & utilities
  • meal plans or groceries
  • books & supplies
  • transportation (parking, public transportation, etc.)
  • personal expenses

What to know: Most schools will have a set budget for off-campus housing so they may not be able to certify the exact amount of your rent or meals if you are living off campus. It’s a good idea to communicate with your school’s financial aid office to let them know if you are planning to live off campus so that they can include as much as possible in your COA to cover those expenses. VSAC, Vermont’s nonprofit higher education agency, can lend for off-campus housing, meals and related expenses as long as your school is able to certify that it is part of your COA.     

How do you use 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 are living on campus. Any money left over will be refunded to the student or borrower.

Once you receive the student loan refund, you can deposit that money into your bank account to use to pay for living expenses.

What to know: If you will need money for off-campus housing in August (such as the security deposit and upfront rent), plan ahead for how you will cover those initial costs before your loan funds are available. Generally, the school tells the lender when to send the money in the loan disbursement. Many schools request the funds for the fall term in August or September, and the funds for the spring term in January. The process can take some time to refund any unused portion of the funds back to the student. Contact your school to check the timing of your refund.

Other tips:

  • Budget for and monitor your expenses. Your loan funds will need to last you until the next semester or academic year (depending on how your loan money is disbursed). Budget wisely so that you don’t run short. Your rent and meals need to align with the budget for off-campus housing that your school allows.  
  • Avoid unnecessary spending. Stretch student loan dollars by cutting expenses and economizing while in school. Don’t use your student loans for spring break travel, clothing, restaurants, expensive electronics, or other unnecessary expenses. 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 begin paying back your loan. By paying the interest on your loan while you are in school, you can reduce what you will need to pay back after graduation.

How do you apply for student loans?

Students apply for federal student loans by filling out the FAFSA. The Free Application for Federal Student Aid determines what federal student loans and federal financial aid you are eligible for. Because federal student loans have special benefits and protections, students should always apply for those funds first. Compare your other options before applying for federal PLUS loans.

Private student loans are offered by banks, credit unions, nonprofit state agencies for higher education (such as VSAC), and online lenders. Approval is based on creditworthiness. All private lenders have different interest rates and terms, so it’s important to compare. Understand how the interest rate and the repayment plan you choose will impact your total cost of borrowing.

Vermont students and families, 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 education. Our goal is to help you understand federal and private loans and compare your options so that you make the best choices for your situation and minimize what you’ll pay to borrow. Learn more about loans.

Borrow only what you need

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Description automatically generatedLoans are borrowed money that must be paid back with interest. This means that the amount you repay will always be more than the amount you borrow. Although you may be eligible to borrow a certain amount, you can always borrow less, reducing the amount you’ll have to pay back. While it’s tempting to say yes to all the loan funds you are offered, it doesn’t mean you should. Read our blog to learn more about what to consider as you pay for education costs.

Cost-saving tips:

  • Apply for free financial aid (such as grants and scholarships). This “gift aid” doesn’t have to be paid back.
  • Use personal savings and income to reduce your need for borrowing. Accept a work-study job if it's in your financial aid offer. These part-time jobs allow you to earn money toward college expenses. Or consider a part-time job while in school.
  • Explore tuition payment plans, which spread payments out over the academic year.

Read more about how to minimize your cost of borrowing with our downloadable guide and helpful links.

Fixed-rate education loans with local Vermont servicecollege students walking on campus

VSAC student and parent loans have fixed rates and can be used by Vermont residents going to programs anywhere in the U.S. or internationally OR for any students attending a Vermont school.

If you’ve already maximized available federal Direct student loans, a VSAC loan may be your lowest-cost option.

Have questions or need more information? Call us at 800-226-1029, 8 a.m. to 4:30 p.m., Monday through Friday, and reach us via email at We're here to help with your career and education needs.