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How financial aid disbursement works

What you should expect at the beginning of your academic term.

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How does student financial aid disbursement work?

The disbursement process will depend on how your school is set up. Universities on a semester schedule will typically disburse financial aid at the beginning of each semester, while other programs may have multiple, smaller disbursement periods.

Federal loans

Your federal loans, such as Direct Loans and Parent PLUS loans, must be disbursed at the beginning of each academic term — or at least twice during the academic year. Your student loans are sent directly to your school where it applies your funds to your tuition and fees, followed by room and board if you're living on campus.

Borrowers must be notified in writing

Each time your loans are disbursed to your bank account, your school must notify you in writing and provide a way to cancel all or part of your federal student loans or Parent PLUS loans. Your servicer should also send a notice to confirm that you received the correct amount of funding, so keep an eye out for emails or letters — and save them in a safe place in case you need to cancel.

Federal grants

Federal grants like the Pell Grant and Federal Supplemental Educational Opportunity Grant (FSEOG) are disbursed similarly to federal student loans. Your school may credit your student account if you owe a balance for tuition and fees, or it may pay you directly. Funds must be disbursed at the beginning of each academic term.

Federal work-study program

Unlike federal loans and grants, earnings through the work-study program are paid directly to students, but you can choose to have your wages put toward tuition, fees and other costs. In most ways, it functions similarly to any other job.

Your employer is required to pay you at least once a month, so if you qualify, the work-study program can be a solid way to earn experience and money throughout the semester.

Other aid

The exact process for other types of aid will depend on the source of your funds.

  • Scholarships and grants. Scholarships and grants are often sent to your school and disbursed at the same time as your federal financial aid. But some smaller scholarships may send you a check or deposit funds directly into your bank account. Check with your funding source to see what options you have.
  • Private student loans. Private student loans are sent to your school. Because there are no strict guidelines to how this process works — and it can take a month or more for your lender to finalize your loan — start comparing private student loans as soon as possible so you can ensure you have the funds you need at the beginning of the term.
  • Other loans. If you or your parent took out another type of loan, such as a HELOC, it's up to you to put that money toward your education. Contact your school's financial aid office to learn more about applying your own money to your student account.

How long does it take for student financial aid to be disbursed?

Your federal student loans should be credited to your account or refunded to you within 14 calendar days of the first day of classes. If you borrow a loan in the middle of the term, your school will have 14 days to credit or refund your loan to you.

For recipients of the Pell Grant, your school must give you a way to buy textbooks and other supplies by the seventh day of your term — provided your Pell Grant generates a credit on your account. Other federal grants may take more time to process, so check with your financial aid office for details on how long your funding will take.

Private scholarships, grants and student loans don't have a strict timeline. For many private lenders, it can take a month or more to finalize your loan, and then your school will need to disburse the funds. Check with your lender — and financial aid office — to confirm that the process is running smoothly.

Note for first-time federal student loan borrowers

First-year undergraduates or first-time borrowers will need to attend a loan counseling session before funds are distributed. And even then, your school may require you to wait up to 30 days after the first day of your term to receive your funds. However, there are some exceptions to this rule. Your financial aid office should be able to tell you if you'll need to wait the full 30 days before seeing a refund.

What happens if I'm owed a refund?

If your financial aid covers more than the cost of tuition and fees, your school will refund the remaining amount directly to you. These can be used for any valid education expenses, like paying for off-campus housing, and will typically be credited to your account within the first few weeks of the term.

How will I receive my refund?

Your refund will be returned to you in one of four ways:

  • Direct deposit into your bank account
  • Check
  • Prepaid debit card
  • Cash

Your school may offer only one or two of these options, so check with your financial aid office to ensure you receive your refund in a way that is convenient to you.

What can I do if I don't have enough financial aid to cover the term?

If you miscalculated the amount of financial aid you need, these are good starting places to find additional funding:

  • Write an appeal letter. Financial aid appeal letters are a tool to help you qualify for more scholarships and grants. They aren't guaranteed to work, but they can be useful if you need additional funding and don't have the ability to take on student loans.
  • Apply for scholarships and grants. Beyond an appeal letter, always be on the lookout for scholarships and grants you could qualify for. Even a few hundred dollars can help ease the burden of debt, so focus on applying frequently — even if you aren't 100% sure you fit the criteria.
  • Request a payment plan. Some schools allow you to pay your tuition and fees as installments throughout the semester. Speak with your financial aid office to see if this is an option for you.
  • Borrow a private loan. If you can't find free aid, turning to a private loan can be a viable option. Some lenders will lend as little as $1,000, so if a small loan is what you need to make ends meet, this may be the best place to look.

See private student loan options

Financial aid not enough to cover your expenses? Check out what private loans you might qualify for.

Data indicated here is updated regularly

Name Product Min. Credit Score Max. Loan Amount APR
Ascent private student loans
540
$200,000
2.71% to 12.99%
EDvestinU Private Student Loans
675
$200,000
4.07% to 9%
Straightforward student loans for undergraduate and graduate students.
LendKey Private Student Loans
Varies by lender
4.99% to 11.06%
This connection service partners with Sallie Mae and WSFS Bank to offer competitive rates.
 Advantage Education Loan Refinance Loan
670
Starting at 3.74%
Refinance to a more flexible repayment plan with this nonprofit lender.
Alliant Credit Union Traditional Student Loan
680
$60,000
Starting at 4.56%
All-purpose personal loans from @pl_product_min_loan_amount@ to @pl_product_max_loan_amount@ with rates that stop at @pl_product_var_rate@.
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Bottom line

In most cases, your financial aid should be disbursed to you within a few weeks of school starting. So when you're prepping for classes, take the time to understand your student loan options on top of other financial aid to ensure you're making the best decisions for your financial future.

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