Does Financial Aid Cover Housing Costs?
Learn how college financial aid factors in and helps cover student housing expenses, from on-campus dorms to off-campus living, as part of your overall cost of attendance.
College is a significant investment, and housing represents a substantial portion of the overall cost. Financial aid programs are designed to help cover a broad range of educational costs, including living expenses like housing. This article clarifies how financial aid can be applied to housing, whether you live on campus or off campus.
Understanding the Cost of Attendance
Financial aid eligibility is based on the Cost of Attendance (COA), the total estimated cost of attending a specific college for one academic year. The COA includes direct costs, like tuition and fees, and indirect costs, such as housing, food, books, supplies, personal expenses, and transportation. Each institution determines its own COA.
A student’s financial aid package is calculated by subtracting their Student Aid Index (SAI) from the institution’s COA. The SAI, which replaced the Expected Family Contribution (EFC) for the 2024-2025 academic year, is a formula-based index from the Free Application for Federal Student Aid (FAFSA). This number indicates a student’s financial strength and their ability to contribute to college costs. Since housing is an integral component of the COA, financial aid helps students cover these living expenses.
Eligible Housing Expenses
Financial aid covers various housing arrangements and associated expenses, which are integrated into the COA. For on-campus housing, direct charges like dorm fees and mandatory meal plans are typically included in the university’s COA. Financial aid can be directly applied to these charges by the institution.
For students living off-campus, financial aid accounts for living expenses such as rent, utilities (electricity, gas, water, and internet), and groceries. These costs are considered part of the student’s overall Cost of Attendance. Even students living at home with parents have a COA allowance for living expenses, though this allowance is generally lower. The specific amount allocated for housing within the COA is an estimated figure set by the school, not based on a student’s actual rent or precise living costs.
Receiving and Using Financial Aid for Housing
Financial aid, encompassing grants, scholarships, and loans, is typically disbursed directly to the college or university first. The institution then applies these funds to cover direct costs billed to the student, such as tuition, fees, and on-campus housing charges.
If financial aid exceeds direct costs, the remaining balance is issued as a refund directly to the student. These refunds cover indirect costs, including off-campus rent, utilities, groceries, and other living expenses. Students are responsible for budgeting these funds responsibly. Confirm specific disbursement dates and refund procedures with your college’s financial aid or bursar’s office to ensure timely access to funds.