Will Student Loans or a Grant Pay for Bills like Rent or Car Payment?

Student loan money is usually credited to your bank account. The grant money can be credited to your account or a check is sent to your college. After, all your college expenses have been paid for through the student loan and/or grant, and if there is any balance left then that money will remain in your account or your college will transfer the balance to your account.

A grant is free money and does not have to be repaid. A student loan, on the other hand, has to be repaid and it has an interest charge. However, what you have been granted, whether loan or grant, that entire amount will belong to you. Once your tuition and college expenses have been paid off, the balance can be utilized by you for paying other education related expenses and bills.

Typically in any school, after tuition and miscellaneous fees are deducted from the financial aid award for the semester (which includes Pell Grant, scholarships, and extra grants from the gov’t), the leftover is deposited into the student’s bank account (it may also be mailed out as a check, depending on student preference). The student is then free to do whatever he or she want with the money provided the money is used for educational related expenses (travel expenses to and from college,  extra books or clothes for school).

Financial aid is meant to pay for your schooling *and* your cost of living while in school. If your cost of living includes car payments and rent, then you should be able to use the money accordingly. This is why on the fafsa, you are asked questions concerning your living conditions, i.e will you be living on campus or off-campus; with or without parents, etc. This is so that your financial need, including living expenses, can be most accurately calculated.

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