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How to Apply for a Living Expense Student Loan

A “living expense” student loan is just what it says it is a loan to augment a student’s ability to pay for his or her living expenses while at college.  Experts and those experienced recommend getting the loan through the federal government supported PLUS loan.  The mechanism for making this happen is the same method as getting tuition and books and such type of loan.  Find a loan provider that is preferred to work with and discuss the situation with that provider’s customer service rep.  The rep will be able to guide the parents and the student correctly to insure that the monies needed for room, board, and other living expenses are sufficiently covered.  The student’s financial aid counselor at school can also help the student and parents in this area.  Once all agree on the amount of money needed then the application for the living expenses money tags along with the application of the tuition et al money.  How the process works is fairly simple.  The application is filed as a PLUS loan with the provider the parents and student have chosen.  The PLUS load application is processed in much the same way as any other loan for college. As with any loan for college, when it is disbursed there is an added 3% origination fee, so insure that this money has also been factored into the needs and financial equation.  The process will come to the point where disbursed monies now go to the student’s college.  Once the college receives the disbursement it will process the disbursement and post to an account for the student at this college.  The student should expect a overage amount because the living expense loan money is there and that should be the overage amount.  When the student receives notice of the account, the student can request a reimbursement from the college for that overage.  The account balance will come to the student in the form of a check – no college will issue reimbursement in cash for what is likely to be a significant amount of money directly to the student.  The student can either have the reimbursement check mailed to the student or the student can make an arrangement to pick the check up from the college’s financial office.  The student should have a checking account with a bank that is local to the college or at a local branch of the bank that the student already has active.   The only real concern once the loan is approved and is ready for disbursement is the amount of time each step will take.  Approval of the loan by the provider happens rather quickly, within a day or two.  Disbursement to the college is then about two to three weeks.  Once the college receives the money and notifies the student another week could pass.  For the college to cut the reimbursement check, that could be two more weeks.  Then mailing to the student is another week.  Finally, depositing the check and having the check clear for the student to be able to use the money is likely about another week.  All totaled the time expired is about eight weeks, or two months.  The point is to be prepared and have planned for it.


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