How do student loans work exactly?

You calll and see if you qualify for a loan

In the U.K. students house share, and most get part time jobs. Nothing is free.

You take out loans to cover the entire cost of university attendance (minus whatever you have otherwise covered with savings, scholarships, grants, or work).  You would take out loans to cover tuition, housing, and other relevant expenses.  University accommodations are not free.  The cost varies by university.  

You don't pay on your loans until you leave the university (graduate or drop out). 

(This is all the case in the US, where I gather you are not from)

The loan is for housing, food, study materials etc. Accomodation isn't free. A small bedsit will cost between 200-800 a month depending on the condition and which city you live in. If you have a close group of friends going to the same university then its cheaper to rent a house together and split the rent and bills equally amongst 4 or 5 of you. If you need more money there's usually quite a lot of part time jobs going in cities with universities. 

You agree to a lifetime of indentured servitude in exchange for a piece of paper that says you know how to do stuff. 

You move in with two or three others in a house share.

In the US, student loans are sent directly to your university and are first used to pay for tuition, fees, and any room and board expenses.  If there is anything left over, the university writes you a check for that amount.