Cost of living grants are sums of money that are provided to individuals who lack the means to cover the costs associated with higher education. Government entities and private organizations use a variety of different indexes to calculate the average cost of living and the average income per household. Prospective students whose household income falls below the level necessary to cover basic living costs can apply for grants. Some cost of living grants can only be used for actual educational expenses while others can be used to cover a variety of other expenses.
National consumer price indexes that reflect the cost of goods and services are examined by the agencies that award cost of living grants. Other expenses such as the average cost of housing and utility bills are also part of the equation. Having determined the average cost of living, the agencies determine the student's income level by taking into account any income that the student's receive either from working or from parents, guardians or other sources. Many students cannot qualify for grants if they are listed as dependents for tax purposes by their parents, regardless of whether their parents provide financial support.
Basic cost of living grants are designed to cover the cost of college tuition. In some instances grants also include money to cover the cost of textbooks and necessary equipment such as science goggles, calculators or paper and writing utensils. Some agencies send the grant money directly to educational establishments while others give the cash to the grant recipient and rely on that individual to use the money for the purpose intended.
Aside from the cost of tuition and classroom materials, many students lack the means to pay for accommodation, food and other basic living essentials. In some countries, cost of living grants are available to students that can be used to cover day-to-day living expenses. Many charitable organizations offer such grants to foreign students from poor nations who otherwise could not afford to study abroad.
In countries that do not have national health care systems, cost of living grants may be available to students who need funds to buy private health insurance. In many instances, grant funds are disbursed directly to the insurance provider rather than to the grant recipient. Agencies in other nations do not provide healthcare grants but government agencies instead subsidize healthcare programs for students.
Generally, grants do not have to be repaid. Nevertheless, if a student's financial circumstances change, some grant agencies have the authority and the ability to demand repayment of grant funds. Reasons for grant funds to be repaid include the student dropping out of college, failing to maintain a certain grade average or committing some kind of fraud in order to obtain funding.