Does Living Off Campus Affect FAFSA?

Students consider various living arrangements while pursuing higher education, and a common question is how living off-campus influences financial aid eligibility. Understanding the relationship between housing choices and the Free Application for Federal Student Aid (FAFSA) is important for students to make informed financial decisions. This article clarifies how off-campus living impacts financial aid, from the calculation of educational costs to the final aid package.

How Housing Status Shapes Your Cost of Attendance

The Cost of Attendance (COA) is a primary factor in determining financial aid, estimating a student’s educational expenses for an academic year. Each college establishes its COA, encompassing components beyond tuition and fees. These components include allowances for books, supplies, transportation, personal expenses, and housing and food.

Housing is a part of the COA, and its estimated amount changes based on a student’s declared living situation. Colleges have different COA figures for students living on-campus, off-campus, or with parents. Living off-campus results in a COA that includes an allowance for rent, utilities, and food, which can vary based on local living expenses.

Conversely, students living with parents have a lower housing and food allowance within their COA, as these costs are assumed minimal or absorbed by the family. While tuition and fees remain consistent regardless of housing, varying housing allowances directly adjust the overall estimated cost of attending the institution. Schools develop these housing cost estimates using different methodologies, reflecting the average expenses in the surrounding community.

Providing Your Housing Information on FAFSA

Students communicate their intended living arrangements on the FAFSA form, an important step in the financial aid process. Historically, the FAFSA included questions for students to select housing status (e.g., “On Campus,” “Off Campus,” or “With Parent”). This informed the financial aid office about anticipated housing expenses.

For the 2024-2025 academic year, the FAFSA changed, removing the direct housing status question. Schools will initially assume housing status based on a student’s dependency and other living details. If this assumed status is incorrect or changes, students must report updated housing plans to their college’s financial aid office. This reporting ensures the COA accurately reflects the student’s housing costs. Providing precise information is important because the housing choice directly influences the COA calculation, which in turn impacts the amount of financial aid a student may receive.

Potential Impact on Your Financial Aid Package

Changes in a student’s housing choice, and thus COA, directly affect demonstrated financial need. Financial need is calculated by subtracting a student’s Student Aid Index (SAI) from the institution’s COA. A higher COA, such as from choosing off-campus housing, can result in greater demonstrated financial need.

Increased financial need can lead to eligibility for larger amounts of need-based aid, such as Pell Grants and Direct Subsidized Loans. Pell Grants are federal grants awarded to undergraduates who show financial need, and their eligibility is directly tied to the SAI and COA. Direct Subsidized Loans are available to undergraduates with demonstrated financial need; the government pays the interest on these loans while the student is enrolled at least half-time.

Conversely, living off-campus with parents results in a lower COA compared to on-campus living, and a student’s demonstrated financial need might decrease. This reduction could lead to a lower amount of need-based aid. Non-need-based aid, such as Direct Unsubsidized Loans, is not affected by changes in COA or financial need, as these loans are available to all eligible students regardless of their financial situation.