<p>I got offerred stafford loans from my school & I've already filled out the pre-requisite stuff (like the MPN) & I was wondering - When exactly do you get/apply for the loans?</p>
<p>Federal student aid can’t be distributed any sooner than 10 days before the start of the semester. So whatever your school considers the first day of the semester, it will be 10 days before that.</p>
<p>How does this help when tuition and room/board is due well before that? Are we supposed to pay this up front and then get money back?</p>
<p>Your school will note the loan amount pending, and deduct it from the amount owed. You will only be billed for the loan amount if for some strange reason the loan doesn’t come through.</p>
<p>And the only reason a Stafford wouldn’t go through is if you didn’t get the MPN signed. So if you know that’s been taken care of, you’re good to go.</p>
<p>And the Stafford money will not be sent to you; it will go directly to the school.</p>
<p>If you are worried about it check with your school. My daughter is doing summer classes and has a summer sub Stafford loan. Because she is doing one a class that starts June, then a second that starts July she does not reach the 6 hours required for federal loans until July so her loans cannot be disbursed until July, while her bill is due mid June. Late bills at her school are assessed a late fee so we contacted them to ask what happens in this circumstance (because if we pay them with a credit card that also adds a fee). Turns out they charge her the late fee but then back it out again once her loan pays the bill in July. Seems a bit tortuous to me, but I am glad I asked. Most financial aid offices are quite willing to explain things if you contact them and ask.</p>
<p>Where I work, aid is disbursed a week before classes begin. If you receive aid in excess of the amount you owe, a refund is generated soon after the initial disbursement is run. That allows students to have book money by the time classes begin. </p>
<p>Some schools hold the disbursements until after classes begin. I believe I read that schools are allowed to hold the disbursement for up to 30 days after classes begin before they have to give a refund.</p>
<p>I just want to add that if you use a lender outside the school’s preferred network and they don’t have electronic transfer capabilities with the school, the lender may issue a check to the school that is written out to the student and the student would have to actually go to the bursar’s office and sign the check.</p>
<p>At least that’s how it worked with Discoverstudentloans and NYU. I spoke to someone at Discover the other day (they called me to see if they could be of any help with this years loans) and they said that it is not within their control to be able to get a school to accept the funds electronically.</p>
<p>So for a $90 savings, my kid had to sign a check 2x a year, no biggie, but an extra step nonetheless</p>
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On my schools website it actually says they are required to hold the funds for 30 days for first time borrowers. It wasn’t like that when I started in 2007, thankfully. There is no way I could have gone to school if I had to pay everything up front.</p>
<p>“Federal regulations stipulate that loan checks for freshman first-time borrowers cannot be released until 30 days after the first official day of classes.”</p>
<p>Here are the regs:
Generally, if you’re a first-year undergraduate student and a first-time borrower, your school cannot disburse your first payment until 30 days after the first day of your enrollment period. This practice ensures you won’t have a loan to repay if you don’t begin classes or if you withdraw during the first 30 days of classes.</p>
<p>A school with a cohort default rate of less than 10 percent for each of the three most recent fiscal years for which data are available are not required to delay the delivery or disbursement of the first disbursement of a loan for 30 days for first-time, first year undergraduate borrowers.</p>
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<p>I work at a large urban state U. We do not have to hold funds for 30 days because we do not have a cohort default rate greater than 10% for the 3 most recent fiscal years. Many schools are not required to hold funds for 30 days.</p>
<p>That’s interesting info Kelsmom. I always wondered why my daughter’s school (large State U) disbursed funds so much quicker than the CC my son goes to. That probably explains it.</p>