Room and board comes into play when pulling money out of IRA’s or 529 plans without penalty.
Penalties can be avoided when the money is used for room and board as long as it doesn’t exceed the school’s “cost of attendance”. My understanding is that term and amount is used for federal financial aid calculations.
Here’s the question … does a commuter school or even an on-line school have an official room and board cost of attendance? If it doesn’t, is potential financial aid (including loans) limited to tuition for students who attend those kinds of schools?
I believe a “cost of attendance” figure is required for any school receiving federal financial aid. Even if you can’t find it on the institution’s web site, a quick call or email to the financial aid office should get you the figure.
FWIW, at a school my wife is applying to, there is the standard cost of attendance, and a reduced cost of attendance for commuters who live with parents. Basically the standard COA allows $15k for living expenses, while the commuter COA only allows $6k for living expenses. There’s a little bit of boilerplate about the commuter COA that states “We are required by federal regulations to assign a reduced rent figure to students who live with their parents (Commuter Budget).”