College students face three types of costs, or expenses, when they attend school.

One is called “direct cost”. This applies to charges from the campus for attending school. It includes tuition, cafeteria plans and dorm fees.

As a college student, you will also have “indirect costs”. This includes outside living expenses, transportation and personal expenses you have while attending the school.

The third type of expense that causes a need for educational debt for living costs is Cost of Attendance (CoA).

A “living expense” student loan is just what it says it is a loan to augment a student’s ability to pay for his or her living expenses while at college.

Student loans are generally limited to the cost of attendance minus other financial aid received.

Some loans, such as the Federal Stafford loan, have lower fixed annual limits.

For example, graduate and professional school students may use a combination of the Federal Stafford and Federal Grad PLUS loan to cover living expenses.

In most cases, the proceeds of a student loan are paid to the college, which applies them first to direct costs, such as tuition and fees.

Any leftover money is then refunded to the student to pay for living expenses.