According to federal rules, student loan money can only be used to pay for tuition and other expenses directly related to the costs of attending school.
Expenses such as textbooks, room and board, and even uniforms can be paid for with student loans.
If you have already consolidated your federal loans in the past, you may also be able to re-consolidate and add other outstanding federal student loans using a Federal Direct Consolidation Loan.
Since Sallie Mae is no longer a federally owned entity (since 2004), Sallie Mae student loans are not eligible for Federal Direct Consolidation.
Sallie Mae student loans offer good interest rates for students but as with any loan you should plan on repaying the loan in the shortest period possible.
You need to carefully consider the amount you need to borrow as well as the percentage of your future income that will be devoted to the repayment of the loan.
That's nearly two percentage points less than it has been for the past year.
The new rate for PLUS loans, which are given to parents, will be 4.86 percent, down from 6.79 percent in the past year.
The rates were determined by Tuesday's Treasury bill auction.
(Rates are set every year on July 1.) The beauty of consolidation is that you lock in one fixed rate that is based on an average of your loans' current rates.
That way you no longer worry about paying more when interest rates climb, which is an inherent risk of variable-rate loans such as the Stafford or PLUS.