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September 10, 2010
Getting and Using Student Loan Money
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Many people who attend college need student loans to pay all or part of their expenses. If you decide to borrow, keep an eye on your student loans so you avoid payments greater than you can afford after you leave school. Figure out what your loan payments will be—and how much you’ll need to make to pay them off—with our debt/salary wizard.
When Do I Get My Student Loan Money?
Federal law requires that first-year undergraduates who are first-time federal student loan borrowers receive the initial disbursement of their loans almost a full month into the school year.
Freshmen have the highest likelihood of dropping out of school. This law helps prevent them from defaulting on student loans they took out for only a brief period spent in school.
If you are not a freshmen, when you get your loan money depends on your school. Your federal financial aid is sent directly to your school and will be dispersed to you according to the school’s schedule.
How Can I Use My Student Loan Money?
When you apply for financial aid, your school will calculate your cost of attendance (COA). This includes tuition, fees, and some living expenses, which may include an allowance for:
- Books
- Supplies (which may include a computer)
- Transportation
- Miscellaneous personal expenses
Your school’s financial aid office should have a policy stating what expenses are included in your COA and how much may be allocated for certain items, like the purchase of a computer. (Please note: the inclusion of a computer in the COA is purely at your school’s discretion.)
After the school determines your COA, your school will award you financial aid, including loans, to cover all or some of your COA.
