How to Use FAFSA for Off-Campus Housing

The Free Application for Federal Student Aid (FAFSA) helps college students manage higher education costs by determining eligibility for federal assistance like grants, work-study, and loans. FAFSA aid covers tuition, fees, and living expenses such as housing, food, books, and transportation. While FAFSA doesn’t directly pay landlords, it’s a foundational step to secure financial aid for off-campus housing.

How FAFSA Considers Housing Costs

Federal student aid eligibility depends on the Cost of Attendance (COA), which each educational institution establishes. The COA estimates total annual expenses, including tuition, fees, housing, food, books, supplies, transportation, and personal expenses. For off-campus students, the school includes an estimated allowance for rent and utilities in their COA.

FAFSA aid is first applied to direct school charges like tuition and fees. If aid exceeds these costs, remaining funds are disbursed to the student to cover other COA components, including off-campus housing.

Determining Your Off-Campus Cost of Attendance

A college’s financial aid office calculates the Cost of Attendance (COA) for students, including specific estimates for off-campus living. These estimates typically account for various living expenses such as rent, utilities (like electricity, water, and internet), groceries, and transportation. Each school employs its own methodology to determine these figures, often based on student surveys and local market research. Students should contact their specific college’s financial aid office to understand how their off-campus housing component of the COA is calculated.

Students generally indicate their housing status—whether they plan to live on-campus, off-campus, or with parents—when completing the FAFSA. This information helps the school assign the appropriate COA budget for their financial aid package. While the school’s estimated allowance is designed to be reasonable, it may not perfectly align with actual market costs in all areas. Students should be aware of this potential difference and plan their personal budgets accordingly to ensure they can cover their real-world living expenses.

Types of Financial Aid for Housing Expenses

Several categories of financial aid, accessible through FAFSA, can be applied toward housing costs. Federal grants, such as the Pell Grant and the Federal Supplemental Educational Opportunity Grant (FSEOG), are “free money” that generally does not need to be repaid. Pell Grants are awarded to undergraduate students demonstrating significant financial need. FSEOG provides additional funds to undergraduates with exceptional financial need at participating institutions. Grant funds are often first applied to tuition and fees, with any remaining balance available for other educational and living expenses, including rent and utilities.

Federal student loans, including Direct Subsidized, Direct Unsubsidized, and PLUS Loans, are another common source of funding. Direct Subsidized Loans are available to undergraduates with financial need, and the U.S. Department of Education pays the interest while the student is in school at least half-time and during grace periods. Direct Unsubsidized Loans are available to undergraduate and graduate students regardless of financial need, with the borrower responsible for all interest. PLUS Loans, offered to graduate or professional students and parents of dependent undergraduates, can cover educational expenses up to the cost of attendance, minus any other aid received. All these loan types can be used to cover living expenses, including housing, as they contribute to the overall Cost of Attendance.

Federal Work-Study programs offer another avenue for students to earn money to help cover their expenses, including housing. Students participating in Work-Study hold part-time jobs, often on campus or with approved off-campus non-profit organizations, and earn at least the federal minimum wage. The earnings from Federal Work-Study are paid directly to the student through regular paychecks. While these funds cannot typically be used to pay upfront institutional charges, they provide income that can be directly applied to living costs like rent and groceries.

Receiving and Applying FAFSA Funds

Once a student has completed their FAFSA, their Cost of Attendance has been determined, and their financial aid package has been accepted, the process of receiving funds begins. Aid funds are generally disbursed by the school directly to the student’s account. This typically occurs after tuition, fees, and any on-campus room and board charges have been paid. Any funds remaining after these direct institutional charges are then released to the student. Common methods for disbursing these excess funds to students include direct deposit into a bank account or a mailed check.

Schools usually disburse financial aid at least once per term, such as per semester or quarter, often around the start of the academic period. For federal student loans, there may be a waiting period, particularly for first-time borrowers, before funds are released. Students should confirm their school’s specific disbursement schedule with the financial aid office. Upon receiving these funds, students are responsible for managing them effectively to cover their off-campus housing and other living expenses. This involves careful budgeting and tracking expenditures for rent, utilities, food, and transportation. Creating a detailed monthly budget can help ensure funds last throughout the semester or academic year. It is also prudent for students to communicate with their landlords regarding the timing of financial aid disbursements, especially if rent is due before funds are received.