How is financial aid disbursed?

[LauriC]

<p>I am very new to all of this and I apologize if this is a stupid question but exactly how are financial aid funds disbursed? Does it all go to the school first or do loans like PLUS go to the parents and the parents pay the school?</p>

<p>I have only received one financial aid package from a college and it states:</p>

<p>Total College Budget: includes tuition, fees, room, meal plan and allowances towards books, transportaion and personal expenses $19200</p>

<p>Award:
College Work-Study Job $1500
Direct Parent Loan $10700
Direct Subsidized Stafford $3500
Direct Unsubsidized Stafford $2000
Perkins Loan $1000
TAP $500
Total $19200</p>

<p>Does the school start with a bill for $19200 or is their bill only for the tuition, fees and room and meal plan up front? </p>

<p>If we take out loans, we want to take out the absolute minimum that we will need but also don't want to be caught short. I am just trying to figure out how the funds are disbursed. Are the loans sent directly to the college and if so and there is more than needed, do they refund the money or is it kept on account at the college? Obviously books and transportation and personal expenses are variable - are they just recommending a loan of a certain amount to ensure that there is enough money to pay for books, transportation and personal expenses?</p>

<p>Is work study paid directly to the student as they work or is it put on account at the college?</p>

<p>Any light you can shed on this subject would be greatly appreciated.</p>

[swimcatsmom]

<p>We don’t have PLUS loans but our experience with grants, stafford loans and perkins loans is that they are paid to the school. The school takes any direct charges out (tuition and fees, room and board if you are on campus, books if you buy them at the book store). The balance is paid to the student. The timing on this seems to vary a lot. At my daughter’s school the “refund” is paid to the student after the add/drop period. So about 2 1/2 weeks into the semester. At my son’s school it takes longer - 5-6 weeks. I have heard quicker and slower here on CC.</p>

<p>For WS the student has to find, apply for and get a WS job. The jobs are hourly paid and the pay may vary by job. The amount paid is based on hourly rate times number of hours worked. My daughter’s first year she earned nowhere near her full WS award. Her 2nd year she earned the full amount. It is paid to the student in a paycheck. It is taxable income but does not incur FICA taxes and does not impact the next years EFC.</p>