A student loan refund is the money that’s left over from your student loans after covering tuition and fees. It’s meant to help you pay for miscellaneous education-related costs, like textbooks, housing and other living expenses.
Many student loan providers allow you to apply for up to 100% of your school-certified cost of attendance (COA). This includes those extra living expenses you might not have the money to cover as a full-time student.
According to federal law, you can’t receive financial aid worth more than the COA — including scholarships, grants, work-study and student loans. So, your refund might be limited by what the school thinks you need. Each school’s financial aid office has a different way of determining the COA and it typically varies from year to year.
Typically, you can pick up a student loan refund check from your school’s financial aid office. It should contact you to tell you how much you have available and ask you whether you’d like to keep it or return it to the Department of Education or your private lender.
You can also check your account before the financial aid office reaches out. If you have a negative balance, this means your school will contact you about issuing a refund soon.
If you decide to pick up your refund check, your financial aid office typically gives you instructions on when and where to pick it up. You can then deposit it into your personal checking or savings account.
You may also be able to get a myFSApay account. But it’s in its pilot stage, and only available to students of five universities until December 2020.
It depends on when your student loans are disbursed — which, in turn, depends on when you applied for a student loan. If your school receives your student loans at the beginning of the semester, your refund should be available shortly after.
But if you apply for financial aid after the semester begins, it could take until the middle or even the end of the semester to get your refund. Contact your school’s financial aid office to get an estimate of when your refund might be ready.
It’s possible. Some schools like Harvard offer cash advances on student loan refunds as long as you apply for student loans and registered for classes well before the semester begins.
Depending on your year in school and when you start, you could get a refund advance to cover the full academic year or individual semesters. Reach out to your financial aid department to find out if they offer advances.
If you have federal loans coming in — or any other federal aid — you can also request to have your money disbursed up to 10 days before classes or the pay period begins. This will make your refund available earlier in the semester.
Each school might have a different process for early disbursement. You can request it by calling, emailing or visiting your school’s financial aid office before the semester is due to start and after you’ve submitted your financial aid application. You might have to go in to fill out and sign an early disbursement form.
Student loan refunds are meant to cover educational expenses that you can’t afford. If you get a student loan refund, you might want to use it in one of the following ways:
How to use your student loan refund for living expenses
There’s technically no way for the Department of Education or your private lender to enforce these guidelines, but we recommend trying to avoid:
Getting a student loan refund might feel like free money from the government or your private lender. But overborrowing will increase the total cost of your loan and can make repayments difficult to afford. Try to restrict your spending to school-related expenses and look to other sources of money like part-time work first.
Learn more about how paying for school works by reading our guide to student loans.
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