The cost of housing -- including your college dorm or an apartment, utility bills, food and other necessities -- can quickly drive up the price of college, tacking several thousand dollars on to your bill. Student loans can help cover these costs, but whether they'll cover the full cost depends on how much you borrow.
Government-backed loans come in two forms. Only undergraduates can get subsidized loans. With these loans, the government pays the interest while you attend school. Unsubsidized loans, however, require you to pay interest but come at a fixed rate. The government establishes a four-year limit on the amount you can borrow, which changes every year. In 2014, the limit for dependent students was $31,000, while independent students can borrow up to $57,500. If this sum isn't sufficient to cover your housing, you may need a private loan.
Private loans come with no hard limits about how much you can borrow, but interest rates tend to be higher and the government won't pay your interest while you're in school. Some students use private loans to supplement their government funds. Depending on the amount your lender offers and the total cost of your tuition and housing, you often can cover all of your costs with a combination of private and government-backed loans.
Educational Factors Affecting Loans
Your enrollment status can affect the loans for which you are eligible, so you'll need to check with your school to learn what constitutes full and part-time enrollment. Government-backed loans are based partially on need, with lower-income students typically getting more money and more loans. Filling out a Free Application for Student Aid with the Department of Education can help you gain an idea of the loan amount for which you are eligible.
Credit and Loans
As long as you haven't previously defaulted on a student loan, you generally can borrow money from the government even if you don't have credit. However, private loans will carefully examine your credit or your parent's -- possibly both, if you're using your parents as a co-signer. Your credit can limit how much you can borrow with these loans, and taking out large loans can ding your credit score.
Van Thompson is an attorney and writer. A former martial arts instructor, he holds bachelor's degrees in music and computer science from Westchester University, and a juris doctor from Georgia State University. He is the recipient of numerous writing awards, including a 2009 CALI Legal Writing Award.