What Can I Use Financial Aid Money For?
Students who qualify for the federal work-study program can work part-time to help pay for their education or living expenses while they’re in school. Work-study jobs are often on campus, but sometimes can be off-campus through partnerships with nonprofit organizations or public agencies. The program emphasizes public service and work related to a student’s field of study.
Work-study students are limited to working part-time and receive a paycheck to help cover costs like books, food, and living expenses. Undergraduate, graduate, and professional studies students are all able to participate in the work-study program if they demonstrate financial need.
The FAFSA also qualifies students for federal student loans. These are generally preferable to private loans, as the interest rates tend to be lower and give students more flexible repayment options.
Federal student loan offers are included in your financial aid package from an individual school and are intended to help students pay for educational costs like tuition or room and board that grants and other funding don’t cover. While loan offers may be included in your financial aid package, you do not have to take them. You can choose to borrow a portion of what is offered or decline them altogether.
Direct subsidized loans, also known as Stafford Loans, are available for undergraduate students with financial need. Students can borrow up to $5,500 per year depending on factors such as what year they are in school and their dependency status. The direct subsidized loan offers fixed interest rates, and interest usually doesn’t start to accrue unless a student is no longer enrolled or drops to part-time enrollment.
Direct unsubsidized loans, sometimes called Unsubsidized Stafford Loans, are available to undergraduate, graduate, and professional degree students, regardless of their financial need. Students can borrow up to $20,500 per year, and interest accrues while a student is still in school, even if they are enrolled full-time.
Direct PLUS loans are for parents who are borrowing money to help fund their child’s education, graduate students, and professional students. Parents can use this loan to borrow for their dependent undergraduate child (often called the parent PLUS loan), and graduate and professional students can also take out direct PLUS loans (generally called grad PLUS loans). The PLUS loan offers the highest interest rate for federal loan options, and students or parents must meet credit history requirements to borrow from this pool of funding.
Federal financial aid is meant to be used for education expenses. Typically, grant and loan money is automatically applied towards your tuition, fees payday loans in Kentucky, and room and board if you live on campus. Whatever is left over will be given to you by your school, often in the form of a check or direct deposit into your bank account.
Work-study money is given directly to you by your school in the form of a paycheck or direct deposit, and you can use this money for tuition, fees, room and board, and other costs related to your education.
- Rent, bills, food, and other costs if you live off-campus
- Textbooks and other course materials
- A laptop for school
You can’t spend financial aid money on leisure items like concert tickets or vacations that aren’t educational or living expenses. Other items, such as clothes for an internship interview, can be purchased with financial aid funding as long as they are related to your education.
If you use scholarship or grant funding for tuition and fees, books, supplies, and required equipment, that funding will be tax-free. Keep track of how much you spend on these expenses so you can access it when you go to file your taxes. If this funding is applied to room and board, travel, and optional equipment, it counts as taxable income.