Faith Morrow
Education loans are a financial pillar for students, covering a wide range of expenses beyond just tuition fees. The best education loans cover living expenses, including accommodation, travel, food, and other day-to-day costs, ensuring students can focus on their studies without financial stress. While the specifics vary by country and lender, understanding what expenses are covered is crucial for effective financial planning. This knowledge empowers students to make informed decisions and fully leverage the benefits of their loans.
| Characteristics | Values |
|---|---|
| Tuition Fees | Covered |
| Accommodation | Covered |
| Travel Expenses | Covered |
| Health Insurance | Covered |
| Study Materials | Covered |
| Examination Fees | Covered |
| Laboratory Fees | Covered |
| Library Charges | Covered |
| Student Union Fees | Covered |
| Visa Application Fees | Covered |
| Field Trips | Covered |
| Tax Benefits | Covered |
| Government Subsidy Schemes | Covered |
| Repayment Flexibility | Covered |
Tuition fees
Education loans offered by banks like Axis Bank in India, for instance, cover the entire tuition fee demanded by the institution. This holds true for both domestic and international students. Similarly, in the United States, the Department of Education allows student loans to be used for living costs, acknowledging that having these expenses covered leaves students with more time to focus on their studies.
Prodigy Finance is another lender that offers student loans covering tuition fees and the full cost of attendance, including living expenses, for international students. This is especially beneficial for those pursuing an international master's degree, as the costs extend far beyond tuition alone.
In addition to tuition fees, education loans often encompass a range of academic-related costs. This includes textbooks, stationery, specialised equipment, and other study materials. Some loans also cover expenses such as health insurance, travel costs, visa application fees, library charges, lab fees, and student union fees.
It is important to note that the provisions of education loans may vary depending on the lending institution and the specific terms and conditions set. Therefore, it is crucial for students to carefully review the loan details and understand the expenses covered before applying.
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Travel expenses
When it comes to travel expenses, education loans can be a great help. Many lenders recognise that travel can be a significant expense for students, especially when studying abroad or at a university far from home. As such, education loans often cover travel expenses, ensuring that you can travel to and from your institution without financial worry.
Travel tickets, including flights, are typically covered by education loans. This is because travel to and from your destination country can be costly, and including these expenses in your loan can alleviate financial stress. It is important to note, however, that this is not always standard practice, and you may need to specifically request to include travel tickets in your loan. It is also crucial to include these expenses in your initial application, as reimbursement after receiving your loan disbursement is unlikely to be approved.
In addition to travel tickets, education loans can also cover travel insurance. This provides financial protection in case of travel-related risks and ensures that you are covered throughout your stay. Furthermore, education loans may also cover expenses related to field trips, educational tours, or other travel costs associated with your course. These costs can quickly add up, and including them in your loan can provide much-needed financial support.
It is worth noting that the provisions of education loans may vary depending on the lending institution. Therefore, it is essential to carefully review the specific terms and conditions set by your bank or financial institution. By understanding the ins and outs of your loan, you can ensure that you are fully leveraging its benefits and that your educational journey is financially secure.
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Health insurance
Education loan insurance is a policy that protects both the borrower and the lender in the case that the borrower is unable to repay the loan due to unforeseen circumstances, such as critical illness, disability, or death. It is not compulsory to opt for education loan insurance, as the requirement varies from lender to lender. For instance, loans from government banks do not require insurance, whereas some private banks or organisations may deem it necessary.
Education loan insurance typically covers the outstanding loan amount, ensuring that the burden does not fall on the borrower's family or co-applicant. It may also cover living expenses incurred during the course of education, as well as tuition fees.
In terms of health insurance, student loans from the federal government, or Direct Loans, can be used to buy health insurance. Many universities require new students to be covered by adequate health insurance, and in some cases, the costs are included in the total enrollment fees. This means that health insurance may already be covered by the Cost of Attendance (COA). If health insurance is not mandated by your university, it is still advisable to protect yourself against unexpected health issues. Health insurance is considered an acceptable expense covered by the COA, but you may need to complete the required paperwork to attach your health insurance costs to your student loan.
If you have already reached your loan cap, you will need to turn to other non-subsidized loans to cover your health insurance costs. If you have exhausted all your student loan options, your parents can consider family insurance plans that also cover children below 26 years of age.
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Study materials
When it comes to education loans, a common misconception is that they do not cover all expenditures that students are expected to spend while studying abroad. However, this is not true. Education loans, be it secured loans from government banks or unsecured loans from private lenders, are designed to provide financial assistance and alleviate the financial burden of studying.
The cost of study materials is a crucial component of education loans. Lenders usually cover study materials and other educational supplies required for academic pursuits. This includes:
- Textbooks
- Reference books
- Stationery
- Laptops
- Computers
Some banks may place a limit on the loan amount allocated for such expenses, so it is advisable to choose a laptop that meets your requirements without exceeding the approved loan amount.
When applying for an education loan, students can mention the cost of study materials as part of their total expenses. It is important to carefully research different lenders and compare their loan terms, interest rates, and living expense coverage options to choose the most suitable education loan.
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Accommodation
When it comes to pursuing higher education, it is crucial to understand the expenses covered under education loans. While loans typically cover tuition fees and academic-related costs, many overlook the inclusion of living expenses such as accommodation.
Different types of loans are available to cover accommodation expenses. An education loan can be used to cover accommodation costs, either directly through the loan amount or by utilising the money borrowed for tuition fees. Additionally, there are specific accommodation loans or mortgages offered by financial institutions, where the loan amount is specifically intended to cover rent or related expenses. These loans are designed to assist students in managing their finances, especially when they may not have sufficient funds.
When applying for an education loan to cover accommodation, it is important to carefully consider the loan amount and create a budget. Students should choose accommodation that fits within their budget and is preferably located close to their university to avoid unnecessary travel expenses. It is also worth noting that some education loans may not cover all accommodation-related costs, such as utilities, so students must review the loan details thoroughly.
In summary, education loans can provide financial support for accommodation expenses, but it is essential to understand the specific terms and conditions of the loan, including eligible expenses and repayment schemes. By including accommodation costs in their education loan, students can secure suitable housing and focus on their academic pursuits without the added financial burden.
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Frequently asked questions
The primary purpose of an education loan is to cover tuition fees. Other essential expenses covered include accommodation, textbooks, stationery, and other study materials.
Some education loans also cover student travel insurance, health insurance, and other miscellaneous costs like library fees, lab charges, and student union fees.
The coverage of living expenses depends on the lending institution. It is crucial to check the specific terms and conditions set by the bank or financial institution.
It is important to use these funds responsibly by prioritising essential expenses such as tuition fees, major living arrangements, and other significant costs. It is also advisable to consider affordable options and evaluate different housing options that align with your budget.
