Written by James Hirby | Fact checked by The Law Dictionary staff
As a current college student, you're probably financing part or all of your tuition expenses with student loans. After all, tuition costs at public universities have more than doubled during the past decade. At private institutions, the situation is downright untenable: Some private schools have more than tripled their tuition costs and slashed their financial aid budgets in response to increasing demand from affluent students. Although the number of for-profit online universities has grown exponentially since the beginning of the 21st century, these institutions suffer from plenty of cost-related drawbacks as well. For instance, they often offer financing options that require students to shoulder high-interest loans that aren't insured by the federal government 's student loan program.
Unfortunately, the miscellaneous expenses associated with successful programs of college education have risen substantially as well. Textbooks, computers and rent are all far more expensive than they were in 2000. If you're looking for an auxiliary source of income to help cover these expenses, you'll need to do some research and come up with a clear spending plan. Ultimately, you'll have several choices.
First, you may be able to use a portion of your so-called primary loans to
cover these costs. Although it's likely that your student lender will disburse your loan funds directly to your educational institution. it's common for banks and other lenders to "overpay." For instance, you may be approved for a loan of $20,000 on a tuition load of just $18,500. If this is the case, your lender will send the full amount of your loan to your school's financial aid department.
After applying the payment to your tuition bill and accounting for various other school-related expenses, the department will write you a check for the remaining balance on your loan. Alternatively, it may ask for your bank account information and make a direct electronic deposit. In either case, you'll receive a substantial amount of cash at the outset of the semester.
Few lenders require students to pay back these funds in a timely fashion. If your lender allows you to keep this extra money, you'll be able to spend it in any way that you choose. Since you'll probably have a wide range of expenses to cover, it's likely that the money will disappear relatively quickly. If you need an additional infusion of cash, you may be able to obtain a private student loan that carries a higher interest rate .