“When does my FAFSA money come in?” is one of the most common questions asked by students awaiting their federal loan payments. FAFSA disbursement may vary by school or individual circumstance.
This depends on how much is awarded and the type of aid granted. Students should be aware of all the next steps for the disbursement of their FAFSA payment once the application is officially approved.
After the FAFSA is submitted and awarded from a student’s school—what happens next? It is important for students to understand everything that is expected once the financial aid department at his or her chosen school awards a federal aid amount. To learn when FAFSA money comes in, as well as how disbursement happens, continue reading below.
Understanding when a FAFSA payment comes in is important for students who have deadlines regarding tuition payments. FAFSA disbursement is intended to cover the full academic year. However, it usually occurs in at least two payments. Students who accept their school’s award will be paid by the school at least once per term, which can be by semester, trimester or even quarter in some cases.
Related Article: FAFSA Verification Process
Schools who do not use traditional FAFSA disbursement dates will generally pay students twice each academic year. Likely, these disbursements of FAFSA will be paid at the beginning and midpoint of the academic year.
For students wondering “how long does it take to receive financial aid?”, FASFA payments can happen in a few different ways, which result in different timelines for payment. There are a few different occasions in which FAFSA payment disbursements may differ, including:
Parents who are taking out a Direct PLUS loan to pay for a student’s tuition will receive a FAFSA disbursement on the same schedule offered by the school, generally twice per academic year. First-year undergraduate students will need to wait at least 30 days after the first day of enrollment in order to receive their first disbursement. Students can speak with their financial aid department in cases where this rule can be waived.
Any first-time borrowers of Direct Subsidized or Unsubsidized Loans will need to complete an entrance counseling course in order to receive his or her first loan disbursement. This rule also applies to graduate and professional students taking out a Direct PLUS loan for the first time. Any student that is being paid through a work-study job will likely be paid at least once a month as he or she fills the requirements outlined by the school.
Any time a student or parent takes out a loan, he or she will be notified in writing for every disbursement of federal funds that occurs. Additionally, information regarding how to cancel some or all of a disbursement for those who do not need the full amount will also be provided. Notices from a loan servicer confirming a FAFSA disbursement has taken place will also be sent to all recipients.
Students will receive different disbursement for FAFSA depending on which type of aid they will be receiving. The differing types of aid that will affect how FAFSA disbursements occur include:
As a situation regarding FAFSA payment changes, the ways in which the payment is made as well as the timeline for payment will change as well.
Grants and student loans will have the same type of disbursement of federal aid. Generally, the college will first apply the grant or loan money toward a student’s tuition, fees and room and board if applicable. Any money that is left over from that FASFA disbursement can be used for other expenses such as meal plans or textbooks and supplies. A student may have the option from his or her school to choose whether the leftover money is provided by cash, check, credit to a bank account or by other means. Any student who decides that he or she will not need a loan for FASFA after it was disbursed will have up to 120 days from the disbursement to cancel the loan in order for the interest and fees to not be charged.
When a student is receiving FAFSA disbursement through a work-study program, he or she will be paid directly by the school, either by cash or check, unless otherwise stated. A student may have the option through the work-study program to have payment sent directly to his or her bank or for the money to be used directly in conjunction with education-related charges through a student account.
Parent PLUS loans will be dispersed differently by crediting the student’s school account in order to pay for post-secondary expenses. A student will have the funds within his or her school account in order to pay for tuition, fees, room and board, and other authorized expenses by the school. If any the Parent PLUS loan funds are left after payment to the school, then the school will likely pay it to the parent, usually in the form of a check. In cases where the parent chooses his or her student to receive the leftover funds, the parent will need to provide written permission first.
Students will know in advance what to expect from FASFA disbursement, as the school he or she chooses to attend will send out financial documentation ahead of the student attending the school. In the case where a student does not receive the type of disbursement of financial aid that he or she expects, it is important for the next step to be contacting the school. Students should not contact the Student Loan government website or login to FASFA to correct any outstanding financial issues. The financial aid office for a student’s school will likely be able to detail why the FASFA disbursements changed and explain why the determination was made.
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