What to know about student loans before borrowing

Borrowing student loans is a very serious process, and there’s a lot to know before you take out a loan. Here are some basic questions and key pieces of information you should know as you prepare to borrow student loans.

Canceling a Student Loan

student borrowerUpon receiving your financial aid award package, you can automatically accept the package. If you complete your promissory note and accept the student loans, you can still change your mind. In fact, until the money is disbursed, you can decline part or all of your student loans – you just need to notify your school that you want to cancel the loans. After the loan has been disbursed, if you discover that you don’t really need to borrow as much as you originally anticipated, review the terms provided on the promissory note to see what the time frame is to cancel the funds.

Getting Your Federal Student Loan Funds

While your college notifies you that you qualify for the funds, there are a few steps that need to be completed before it will disburse your student loans. First-time borrowers need to complete the entrance counseling for student loans. This can often be done online, and your school is notified when you complete the counseling. If you are an undergraduate student, you will have to wait 30 days after the semester begins to receive your funds. Your school will typically take out the funds you owe them first, before disbursing the rest of the loan to you. This way your tuition, fees and college housing are covered before any funds can be spent on your other college expenses.

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