You've applied for the loan, it's been approved, and you've signed the promissory note. What’s next?
Where is the money?
The money doesn’t come directly to you. Rather, the proceeds are sent to the school, either by check or electronic funds transfer.
Then the school applies the funds to the outstanding balance on your school account, which typically includes your bill for tuition, fees, room, board, and other school charges.
Once those costs are paid, you'll receive any remaining proceeds to cover other expenses.
When is the money sent?
Funds will not be disbursed until you enroll and, even then, the money will not arrive all at once. Lenders send money in installments—called disbursements—based on academic periods.
The timing of disbursements will vary from school to school and by loan program. Under most federal loan programs, loan proceeds to first-year undergraduates who are also first-time borrowers can't be disbursed by lenders or credited to student accounts until 30 days after enrollment.
Check with your financial aid office to learn your school's policy so you're not surprised.
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