Whats the best way to do take out a student loan to pay for non-tuition costs?
Keep in mind that it will take you 15+ years to pay off you student loans, and the payments are not insignificant (I have about 15K in loans with Sallie, and five years left in the fifteen-year repayment period. My monthly loan payment is more than my car payment). You can adjust your loan payment plan to make the individual payments smaller, but then you might be paying for the next thirty years. If the amount of each payment will matter at all to you once you start working, and you can possibly get by without your car until you can afford to fix it with your own money, you should think twice about this.
My experience as a grad student (at USC) was that the school’s financial aid office actively interfered in the process. Sallie Mae agreed to loan me a certain amount, but USC didn’t care; they wouldn’t let me have all of it unless I justified to them why I needed it. I put a lot of time and energy into arguing with them, to no avail. Part of their ridiculous policy was that if you were an orphan, they’d let you have more money, because that implied that you were less likely to have someone else to help you out.
The total amount of your loans and other aid, private and otherwise, cannot exceed the total cost of education minus your expected contribution. Generally, the funds get sent to the school first, which certifies them and deposits them into your student account. The school then cuts you a check, and you can basically spend it on radios and moonpies for all they care.
