4 Student Loan Mistakes To Avoid When Living Off Campus Pay for college


Student loans can be used to pay for off-campus living expenses like rent and food, but experts warn against relying too much on loans for those who live in an apartment near campus or those who do the homework. shuttle and live with their families.

“Usually, the cost of attendance is higher when a student chooses to live off campus; however, this usually provides additional funding for students due to the higher cost of attendance,” Deborah Stanley, Director of financial aid to Bowie State University in Maryland wrote in an email.

Because living off campus can mean becoming eligible for more student loans, experts advise students to be cautious and avoid these common mistakes:

  • Skip the free app for Federal Student Aid.
  • Live generously.
  • Borrow too much or too little.
  • Rely only on loans.

Skip the free application for federal student aid

To receive Federal Student Loans, students must first complete the Free Federal Student Aid Application, or FAFSA. On the form, applicants can specify whether they plan to live off-campus, on-campus, or commute while living with parents, says Brad Barnett, director of financial aid and scholarships at James University. Madison, Virginia.

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Colleges create estimates of the cost of living for students in each of these three categories based on surveys and statistics, says Jerry Cebrzynski, associate vice president for financial aid at Lake Forrest College in Ill. . These cost of living estimates are one element used to determine a student’s eligibility for student loans.

“On campus, of course, we know what those costs are; off campus, we get an estimate for rent and meals; and for a traveling student who lives with a parent, the tuition and fees will be the same, the meals will likely be the same, but that’s the rent part of that, as they probably don’t pay rent at their house. parents, which is taken out of the equation, ”says Cebrzynski.

If a student’s financial aid exceeds tuition, fees, and any other billable expenses, he or she usually receives a refund for the remaining amount. This money, usually paid at the start of the semester, can be used for rent, bills, food, and other off-campus necessities.

The process for private student loans differs from that for federal student loans: students must apply through a private lender rather than the FAFSA, and they generally must have a co-signer on the loan.

Living lavishly

Students living off campus should consider where they can cut spending and how they can get the most out of student loans, experts say.

“All too often, students don’t look at what they can do in their current environment to make it more affordable,” Barnett says. “They just think they need more money.”

Overspending or using student loans to support an expensive lifestyle can lead to immense financial debt burden. A luxury apartment building, for example, can take a heavy toll on a student’s finances while studying, according to Julie Selander, director of One Stop Student Services at the University of Minnesota — Twin Cities. The office offers, among other things, financial literacy awareness services.

High-end housing is particularly tempting since it is often built around campuses and intended for students. But resist the urge to move in. “You don’t have to follow the Joneses around campus,” says Selander.

Borrow too much or too little

Off-campus students, like all borrowers, should follow the ABC rule: always borrow prudently, says Cebrzynski.

Although a student may be eligible for a certain amount of loans, it is not always wise to borrow the full amount. But students should also carefully list all off-campus expenses in a personal budget to avoid overlooking costs.

“Students often don’t accurately budget for expenses related to off-campus living, forcing them to borrow too much or too little depending on their needs and expenses,” says Stanley.

Any costs that have been neatly bundled into dorm fees, such as cable and internet, energy bills, and furniture, will be taken from loans or a student’s pocket if they have chosen to live out. of campus. And students will have new financial responsibilities, such as a security deposit, rental insurance, and home maintenance supplies.

One of the best ways to cut expenses is to ditch the car, Barnett says, especially since many campuses are within walking distance or have affordable bus systems and shuttle services. “The car problem is important,” he says. “You really don’t need a car on a college campus.”

Rely on loans only

Students may be able to fully fund their living expenses with student loans, says Selander. But that doesn’t mean they should.

Every dollar borrowed must be repaid, with interest, after leaving school. This interest can range from 2.75% for federal undergraduate student loans to 5.3% for PLUS loans disbursed between July 1, 2020 and July 1, 2021. Any money students can spend on their tuition fees. sustenance will be cheaper in the long run. and could prevent them from having to deal with runaway student loan debt after graduation.

Students can dip into their savings and look for part-time employment on campus that can be balanced with classroom work.

“Off-campus housing can be much more affordable for the students who ‘get it,’ says Barnett. “It means finding an inexpensive place to live, figuring out how to shop and cutting back on utilities. “

Are you trying to finance your studies? Get tips and more at the US News Paying for College center.

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