Can I Take Leftover Money From My Student Loans?
Student loans are the federal government's way of making sure those who meet eligibility criteria including income restrictions have the ability to pursue a college education. Sometimes the amount of the federal student loan is more than college tuition and books cost. Students can keep the leftover money, as long as they use it for living expenses or other education assistance purposes.
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The Loans
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You will typically have the guidance of a student adviser throughout the student loan process. You must fill out an application that includes not only your financial information, but if you live with your parents you must complete a section about their financial information. Based on several factors including your financial status, the cost of your university, books and parking pass, the federal government determines whether you are eligible for a student loan and if so, the amount of the loan. As of 2011, the maximum student loan amount was approximately $5,500 per semester.
Left Over Money
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Once your loan has been approved, a check is sent to the student advising center at the college, where you can pick it up. The check can be cashed or deposited into an account of your choice to use for college expenses. Tuition, books, parking passes and meal plans are examples of college expenses. In many cases, the loan check is for more than the expenses and there is leftover money that ranges from a few hundred to a couple thousand dollars.
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How to Spend it
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As part of the application process, you agreed to only use the student loan funds for college expenses; however, college expenses are loosely defined and can include living expenses, technology and even entertainment if you attend a play or movie as part of research for a term paper or class project. Technology expenses include a new computer to complete course work, rent, food, utilities or the cost of daycare for your children.
Caution
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Though student loans can be used for things outside of basic tuition and books, it is prudent to remember it is a loan that must be paid back at some point. Therefore, if you discover you have more money left over than you need, or your living expenses are less than anticipated, you can take the balance of the loan back to your student advising center and have it sent back to the federal government.This will reduce the amount you owe when you graduate and have to begin making payments on your student loans.
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