Once you’re approved for student aid, it’s time to ask the next big question — how is financial aid disbursed?
Yes, it’s good to know you’re getting help paying for college. But what’s even better is knowing when to expect your financial aid, and how you’re going to receive it. That’s how you plan and that’s how you budget.
There is no universal answer. Financial aid disbursement rules vary depending on the type of student aid you receive.
Student loans and grants
Any financial aid you’ve been awarded through a student loan or grant will automatically go toward your tuition, fees, and room and board. Your disbursement is typically split into at least two equal payments over the course of an academic year.
If you are a first-year undergraduate borrowing money for the first time, you could be looking at a delay of 30 days before the loan is disbursed. (That’s 30 days from the first day of the term for which the financial aid is awarded).
Check with your school’s financial aid office to find out whether this 30-day delay applies.
First-time borrowers of Direct Subsidized and Unsubsidized Loans are expected to go through entrance counseling before financial aid disbursement.
The same is true for graduate and professional students who take out Direct PLUS Loans for the first time; they must complete entrance counseling, too.
Other disbursement requirements
To avoid any potential disbursement delays, make sure you do all of the following as soon as possible:
- Register for the number of classes needed to meet the credit requirements to receive your student aid.
- Resolve any issues with your Free Application for Federal Student Aid so your FAFSA disbursement is timely.
- Sign your Master Promissory Note (MPN) for Direct Subsidized and Unsubsidized Loans.
If you’re not sure whether any or all of these requirements have been met, contact your school’s financial aid office.
When your loans are disbursed, you will get two notifications: One from the school letting you know your aid has been disbursed and one from your loan servicer confirming the disbursement.
If there are any funds from grant or student loan disbursements left over once tuition, fees, and room and board are paid, the remaining balance will be paid directly to you in the form of cash or check, or deposited into your bank account.
You can do one of two things with your refund:
- Use it wisely to cover other college expenses, like books, supplies, and transportation.
- Return student loan money you don’t need for college expenses. Sure, you could find something to do with it, but if everything is covered you’re better off returning what you can to minimize your student loan debt and interest fees.
Parent PLUS Loans
Similar to student loans, financial aid awarded through Parent PLUS Loans must be automatically applied to tuition, fees, and room and board first. Also similar to student loans, disbursements of Parent PLUS Loans are typically split into at least two payments over the course of the academic year.
Any remaining balance is refunded to parent borrowers unless otherwise instructed. Parents can request that refunds be made directly to the student, instead.
Unlike student loans, Parent PLUS Loans do not require entrance counseling.
Unlike other forms of financial aid that automatically go toward your college costs, the money you earn on your work-study job must be paid directly to you unless you request otherwise.
Expect to be paid by cash or check. If you prefer, you can ask the school to deposit your payments into your bank account. Either way, you must be paid at least once a month.
What paying you means, of course, is that you have complete control over how your work-study money is spent. If you would rather relieve yourself of this responsibility, you can ask your school if they will put the money directly toward tuition, fees, or room and board instead.
- Don’t know when to expect your financial aid disbursement?
Contact your school’s financial aid office to find out the disbursement schedule.
- Problem with a disbursement?
Maybe the student aid you received is the wrong amount, or maybe a payment hasn’t shown up at all. Whatever your issue with a student aid disbursement, contact your school’s financial aid office to see about resolving it.
- Not sure how to use your refund?
Financial aid is intended to go toward college expenses, so use it accordingly.
Maybe you need your refund to cover the cost of textbooks, equipment, and supplies. Maybe you need a new computer. If you live off-campus, maybe you need to use your refund for rent, utilities, or groceries.
In other words, use your student loan disbursement for things you really need. To help you figure out what that is, get yourself a basic college budget.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.50% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 17, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/17/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.49% effective March 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.50% – 7.27%1||Undergrad & Graduate|
|2.50% – 7.12%3||Undergrad & Graduate|
|2.81% – 8.79%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.55% – 7.12%5||Undergrad & Graduate|
|3.00% – 9.74%6||Undergrad & Graduate|