What is disbursement?

Disbursement is the process through which your school releases your financial aid to you. Funds are typically disbursed at the beginning of each academic term, with schools being required to deliver financial aid to qualifying students at least twice per academic year. Your school’s financial aid office will notify you in advance of the disbursement schedule.

When Does Disbursement Happen?

Disbursement is one of the last steps in the student loan process. It happens after you’ve submitted your FAFSA®, reviewed your financial aid options, and confirmed with your school which types of financial aid you want to receive.

Although financial aid disbursement typically happens at the beginning of the academic term, you may have to wait a few additional weeks or complete a final step before receiving your funds. For example, first-time undergraduate borrowers typically have to wait 30 days from the start of the enrollment period to receive funds.

First-time Subsidized Stafford Loan, Unsubsidized Stafford Loan, and PLUS Loan recipients have to complete a loan counseling session before receiving their first disbursements. If you aren’t sure whether any of these situations apply to you, check with your school’s financial aid office.

How Often Does Disbursement Happen?

While disbursements typically start at the beginning of the academic term, lenders don’t provide funds only once per year. Instead, your school will disburse funds at least once per academic term. If your school is on a semester plan, you’ll usually get two disbursements per year, but if your school is on a quarter plan, you’ll get at least four disbursements per year. If you’re participating in the federal work-study program, you can expect monthly payments.

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How Does Disbursement Happen?

Your school receives students’ financial aid funds directly from the federal government and private lenders. When your school’s financial aid office disburses funds, it pays your tuition, fees, room, and board first in the form of a credit to your student account. If any funds remain, your school’s financial aid office directs the funds to you in the form of a check or a direct deposit. Since the method varies, check with your school to confirm how you’ll receive any leftover aid.

If you’re in a work-study program, disbursements happen a little differently. You’ll receive disbursements directly in the form of a check or direct deposit, but you might be able to request that your school apply them to your student account.

How Do You Know About Your Disbursement?

Educational institutions have to notify you in writing about your financial aid disbursement. You’ll receive a notice detailing your total loan amount and the upcoming disbursement. Once your school releases the funds, you’ll receive a notice from your student loan servicer confirming the disbursement.

Can You Cancel a Loan After Disbursement?

You can cancel a student loan or grant up to 120 days after disbursement without having to pay fees or interest charges. Keep in mind that you may have to pay outstanding tuition and fees out of pocket or secure an alternate source of funding.

Before you can get the student loan disbursements you need, it’s essential to complete the FAFSA®. Once you’ve completed this free application for financial aid, you’ll be on the right track to affording college.

Federal Student Aid. “Complete Counseling.” Web. 3 March 2018.

Federal Student Aid. “Loan Servicers.” Web. 3 March 2018.