Your FAFSA will give your college the information it needs to determine your Expected Family Contribution. This amount will be subtracted from your cost of attendance to get the total amount you’re eligible for in subsidized loans. You can use the Fafsa4caster to see how much aid you would be eligible for.
If you qualify for a federally-backed student loan, you can use your financial aid disbursement surplus to pay for your miscellaneous living expenses. In most cases, your disbursement will be forwarded directly to your school’s financial aid office, where the amount of your tuition will be taken out. Once this process is complete, you can ask your financial aid office for a refund of the surplus (whatever’s left over). You can then use that refund to pay whatever expenses you have. It isn’t uncommon for a school to withdraw too much from students’ financial aid disbursements, so keep a close eye out for discrepancies.
If you’re not eligible for a refund or a subsidized student loan, you can still use student loans to pay your living expenses. You may, however, need to take out an additional loan to do so. The downside of this method is that you won’t be able to take out another federal subsidized loan to pay for your living expenses. (more…)