Your college takes out the funds from your loan that have been designated to help cover your costs.

• This includes your tuition, course fees and – unless you live off campus – your room and meal plan.

Note: Even though your agreement is for a full year of Federal Student Loans, your college will take half those funds at the start of your first semester and the other half at the start of your second semester. That way, you don’t pay interest on the entire amount for a school year.

Subsidized and unsubsidized loans: In most cases, interest will start to be charged as soon as your loan is used. However, if you qualified for a low-income subsidized loan, the government will pay your interest during the time you’re in college.