Plus Loan

[tjt27]

Looking at loan options and I'm a bit confused..

I have been extremely fortunate having not had to rely on loans before so I am new to all of this. I will probably need to take out a stafford loan and graduate plus. If I were to take out a graduate plus loan do I have control of those funds to use as I need (living costs-rent, groceries, necessities) or does the school have control to use strictly for educational costs?

I feel a bit dumb asking, but I know someone has the answer

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[themmases]

I hope someone will correct me if I'm wrong, but I believe student loans are managed through the school rather than given to you directly. So they're disbursed to your institution, the amount needed to cover your tuition and fees is kept by them, and the difference is refunded to you by the school.

I'm really fortunate in only having to use Stafford loans and this is how they work. Both Stafford loans and PLUS loans (and anything else you might qualify for) are listed in your award letter from your school for you to accept or decline. The difference between the two lies in eligibility criteria (PLUS loans are not available to those with an adverse credit history without an endorser or extenuating circumstances), interest rates and fees, and possibly repayment options, rather than in how the money is disbursed to you.

The FAFSA pages are mostly aimed at undergraduates, but most of the information applies to grad and professional students too. Our loans are just separate types of unsubsidized and PLUS loans which are also loan types available to undergrads. This is the page I fact checked myself with: https://studentaid.ed.gov/sa/fafsa/next-steps/receive-aid

 

[Vespasian]

@themmases you're correct. Your school establishes your CoA and breakdown of your FA, the school accepts the money to cover your tuition/costs of attendance (lab fees, advance textbook purchases, etc). Any remainder is sent to you- use it as you need it. If you get more than what you need and don't want it let your school know before it's disbursed or immediately after.