Financial Aid Disbursement Dates
As a quick recap, some of the main steps of financial aid include:
- Submission of the Free Application for Federal Student Aid (FAFSA)
- Receiving a financial aid award letter from admitting schools
- Carefully reviewing all financial aid offers in each award letter
- Notifying the school where you will matriculate about which aid offers you accept
When thinking about financial aid disbursement dates, the most important thing to understand is that funds are first sent to the school, and the school then applies them to the student’s account. Students usually do not receive a disbursement directly from the source of aid. Also, if there are funds remaining after the school has applied the aid to the student’s account, those funds may be sent to the student or returned to the source (it depends on the form of aid).
As Federal Student Aid explains, schools that follow a semester, trimester, or quarter schedule must apply funds to the student’s account once per term. Schools that do not follow this schedule will generally pay the student’s account at the beginning of the academic year and again at the mid-point. Recipients of the following forms of aid can follow these basic guidelines about disbursement:
- Direct PLUS Loans: Parents should expect the funds to be applied to the student’s account at least once per term (no entrance counseling is required).
- Undergraduates: Freshmen who are first-time borrowers may have to wait 30 days after the first day of enrollment for disbursement.
- Direct Subsidized Loans and Unsubsidized Loans: First-time borrowers must complete an entrance counseling session before the first disbursement.
- Work-Study: This form of federal aid must be earned, and the school-employer will pay wages at least once a month.
Work-study is a great option for students who need money to cover day-to-day expenses. In addition, some students may also receive a portion of grants and student loans to help with the cost of living. When the school receives grants and loans, it will usually first apply them to tuition, fees, and any on-campus housing and meal plan costs. Any remaining money may be paid directly to the student, depending on the school’s policy.
Regarding Direct PLUS Loans, if there is money left over after the school applies the funds to the student’s account, the school will disburse the remainder directly to the parent. With the proper instruction, some schools will permit any remainder to be distributed directly to the student. It is best to contact the school’s financial aid office directly to learn the school’s procedure regarding disbursement of excess funds.
Schools will notify student and parent borrowers whenever a federal loan has been disbursed. This notice not only keeps borrowers informed of student account activity, but also gives them the option to cancel all or part of the loan. If a loan is disbursed and then it turns out the money is not needed for school and other expenses, then the borrowers has the right to cancel the loan within 120 days of the disbursement. The borrower will not have to pay any interest or fees.