How to Get a Student Loan to Pay For Housing Off-Campus

by Jackie Lohrey
Three young women are studying together in their apartment.

Off-campus housing can be a good choice for students who plan to attend school year-round, want to get away from the noise and distractions inherent in dorm life or who need to establish a rental history. However, while living in an off-campus house or apartment can be beneficial, it takes planning and a good budget to ensure you can pay rent and other monthly expenses on time.

How It Works

You can use excess proceeds from federal Stafford and Perkins loans and from a Parent Loan for Undergraduate Students -- as well as loans from private lenders -- to pay rent and utility expenses relating to off-campus housing. The federal government and most private lenders disburse loan proceeds directly to your school. After deducting amounts due for tuition, associated fees and on-campus room and board, the school releases any excess to you. Some schools send out a refund check while others apply the refund to an electronic account and issue you a debit card. In any case, the trick to getting a student loan to pay for off-campus housing is to maximize your refund.

Maximize Federal Student Aid

Financial assistance starts with filling out the Free Application for Federal Student Aid. While the financial information you and your parents provide plays a major role in determining how much financial assistance you will receive, there are things you can do to increase the refund amount. First, accept the maximum amount of financial aid offered to you. Second, ask for the entire amount as a loan instead of requesting some in the form of a work-study program. This will ensure you receive the entire refund upfront instead of receiving a portion incrementally over the course of the semester. This can be especially helpful if your landlord requires a full semester of rent in advance instead of monthly rent payments.

A Parent Loan for Undergraduate Students

An independent student or a parent who meets credit requirements can apply for a federal loan called a Parent Loan for Undergraduate Students, more commonly referred to as a PLUS loan. Because you can use these funds to pay for off-campus housing, this is a good option if you don’t qualify for federal assistance or do qualify but do not receive a refund. Because such loans can’t exceed the total cost of attendance, the U.S. Department of Education allows each school to determine the maximum that a parent can borrow.

Explore Private Student Loans

Private student loans and personal loans are not the same types of loans. According to Citizens Bank, the school you’re attending determines how much you or your parents can borrow. For this reason, you’ll most likely need to submit an application for federal loan assistance, even if you’re sure that you won’t qualify. Just as with other forms of assistance, the amount borrowed goes first to pay invoiced expenses. To get a private loan to pay for off-campus housing, you’ll need to pay for tuition and fees using other resources or request the total cost of attendance.

About the Author

Based in Green Bay, Wisc., Jackie Lohrey has been writing professionally since 2009. In addition to writing web content and training manuals for small business clients and nonprofit organizations, including ERA Realtors and the Bay Area Humane Society, Lohrey also works as a finance data analyst for a global business outsourcing company.

Photo Credits

  • James Woodson/Digital Vision/Getty Images