Hacker News Reader

Comment by chowells | Hacker News Reader

I'm shocked no one has answered the actual question yet: because this is financial aid, not tuition coverage. Financial aid is intended to make it possible to be a student. That means a lot more than tuition. Fees. Books. Food. Rent. Clothing. Car repairs. The general feeling of financial stability that allows you to relax enough to actually learn in your time at school.

Financial aid offers so much more than tuition coverage. I don't see how any list of specific benefits could come close to doing as much for allowing a student to feel financially secure.

View on HN

Yes, yes, if my tuition was 100% free I would still need to take out loans to actually attend to school. My parents sure as fuck weren't giving me a living stipend and didn't have the time to work while classes were in session so my living expenses were mostly paid for by loans.

I'm not aware of any financial aid package (outside of maybe some private loans?) that you can apply for with the intent of using that money for car repairs and have it not be fraud.

Aside from being fraud it's also incredibly stupid from a long-term financial stability standpoint. Student loans cannot be discharged in bankruptcy and they are there until you pay them in full. You're better off putting your car repairs on a credit card and paying a higher interest rate if the alternative is "the only way out of this $2,000 bill is that you die."

> You're better off putting your car repairs on a credit card and paying a higher interest rate

What!? No!

You're willing to pay often 25% interest on a credit card on the off chance you need to file for bankruptcy?

(That is, assuming its not fraud, of course)

> I'm not aware of any financial aid package (outside of maybe some private loans?) that you can apply for with the intent of using that money for car repairs and have it not be fraud.

How do you think people pay rent, feed themselves, buy textbooks, etc, while in school? You just aren’t aware how financial aid works

Student loans explicitly can’t be used for car repairs [0]. You can use it for transportation like buses and trains, rent, gas, and meal plans (but oddly not groceries and restaurants).

So students typically work jobs, use savings, get help from friends and family.

[0] https://www.salliemae.com/blog/what-to-use-student-loans-for...

How is this enforced, given that dollars are fungible?

It's not enforced because it's not true, the GP didn't read the article they posted, it's just a shitty financial advice column. Those "restrictions" are just suggestions.

Your link says no such thing and doesn't even mention car repairs. In fact it says the exact opposite

>Otherwise, use your leftover student loan money for anything you absolutely need for school.

>Ultimately, any leftover loan money is yours to use how you’d like.

This article is merely a shitty low quality advice article, these are suggestions.

get a part time job? take out student loans? study something (stem or law) that will actually enable them to get out of student debt?

Student loans are student financial aid. So you're saying student financial aid is in fact supposed to cover general costs of living while a student?

plenty of people have used financial aid money to buy crypto. To great success, I might add.

So why, then, is the money not simply paid directly to the institution, thus completely eliminating any chance the money could be used for something besides payment for educational expenses?

Have you put any thought into why that isn't the way its done?

This is how it was done for me. I’m not OP. But I didn’t have access to the money at all. It went directly to the school.

If you have a balance after the school pays itself the tuition and fees you owe them then you simply request the bursar distribute the remainder of the funds to your bank account. You then use that money to pay your living expenses.

Of course, if you bought your room and board from your college there would be little to no money leftover after tuition and fees were paid.

Source: Personal experience.

It’s a thing. Source: two people I know did a grad program where the school set them up to take out 20% more in loans than needed to cover expenses and they got the 20% in cash at the start of each semester.

This was a while back, but you could buy anything at our college "bookstore" and it would show up on your bursar bill and be payable by student loans. Worse, it would show up as a charge "Cornell Bookstore" so your parents didn't even know the charges weren't books.

In actuality, the bookstore had not only books but a good 700sqft of CDs (yes, this is a while ago...), clothing, memorabilia, food, junkfood, etc.

You could also have the Bursar disburse cash straight to your account for off-campus rent or food. How you spent it was up to you. Several students I know put it right into the then-roaring late-90s stock market.

Not saying this is the right thing to do, but thats how it was

You are 100% wrong.

Whatever financial aid you receive is paid to you as the student, as a literal check, once the cost of attendance is paid to the institution. You can then use that money to pay for whatever you want. Some low-income students actually get paid to go to community college because of PELL and state aid packages, even without loans.

Google, "Financial Aid Refund".

The most cursory Google search turns up tons of sources that say otherwise. For example[1]:

> Student loans are intended to pay for college, but education costs include more than tuition. You can also use student loans for living expenses. You’re limited to borrowing the school’s cost of attendance — that’s tuition and fees, books and supplies, room and board, transportation, and personal expenses —minus any aid you receive.

In other words, once you've paid tuition the balance is yours to do whatever you want/need to continue as a student, including paying rent or fixing your car. After all, barriers to poor people attending college go far beyond just the cost of tuition.

[1] https://www.nerdwallet.com/article/loans/student-loans/stude...

If it comes to needing to discharge your student loan debt and you’re gonna declare bankruptcy anyway, it’s fairly easy to convert some or all (depending on the amount) of it to credit card debt. In fact I did this bec I’ve just been rolling it around on 0% apr cards for the last few years, paying essentially 0% interest.

Not at all, you can use financial aid and student loans for living expenses and it's incredibly common to do so. How else would you pay rent and buy food if you are a full time student? Part time jobs usually don't pay nearly enough to cover all living expenses and many full time students don't work part time jobs at all.

If you're wondering how this works, financial aid and student loans are distributed to your school, tuition and fees are paid, and then you request the school distributes the rest to your bank account. I did this is college, it's totally and completely normal. No everyone's parents are willing and able to just pay for their kids living expenses.

> I'm not aware of any financial aid package (outside of maybe some private loans?) that you can apply for with the intent of using that money for car repairs and have it not be fraud.

When I was in undergrad (granted, 20+ years ago) part of my aid was a couple thousand a year in direct cash payments to me. There were no restrictions whatsoever on this money.

You are simply ignorant. The money is deposited into the students' account after tuition is deducted. They can do whatever they want with it.

The GI Bill directly pays tuition and gives you a stipend meant to be used to rent and any living expenses you may have. And it's transferable to other people.

Not necessarily. Plenty of students have no other legitimate credit options that allow them to not need to immediately start paying down the principal.

During my time I had to routinely apply for student loans every year to cover housing, food, and other living expenses and it made sense because unless I was doing an internship the next semester - I wouldn't be able to make any payments until I was done with school and had a full time job.

Was able to consolidate and refinance all my private loans to a variable 4.5% back in late 2019 and since then has gone to 2.48% which is now less than my mortgage interest rate. Leveraging student loans for financial flexibility opened the doors for me to live a great life during some super chaotic but fun years.

Reply on news.ycombinator.com