Waiting for your student loan to disburse? You and 13 million others! Your student loan will cover full or partial tuition costs, and you will be given a remainder, if there is one, to your bank account. While you are waiting, you may still be responsible for other associated school costs such as living expenses, textbooks and other course materials. So understanding your financial timeline is important. How long does it take to get a student loan disbursement? Find out below.

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What does it mean when a student loan is disbursed

No, student loans are not distributed immediately to you.

The process of disbursing student loans can take a few weeks, especially if the loan is being issued to pay for tuition at a private university or college. Once you’ve been approved, your school will use the loan money to pay for all of your tuition and fees. You’ll be able to borrow up to the total cost of attendance at your school, minus any financial aid you’ve already received.

Student loans are generally disbursed immediately to your bank account, but there may be some delay if you’re waiting on a direct deposit of funds. The amount that gets transferred to your bank account will depend on the type of loan you have and how much you owe; it can take anywhere from one business day to a few weeks for all of the money to be transferred.

Here are the things we will talk about in today’s article; are student loans disbursed immediately to you, student loans that go directly to you, student loan disbursement dates 2022, what is a loan disbursement and other related information.

are student loans disbursed immediately to you

How Long Does the Student Loan Disbursement Process Take?

When you’re planning to enroll in college, it’s important to organize ahead of time, and learning how student loans work is a great first step. You may also want to consider how long it takes to get a student loan so you can be ready to pay tuition when the time comes.

The length of time it takes to process and disburse student loans can vary, but planning ahead will help you to prepare. Generally, you can expect the whole process to take between a few weeks and a few months, depending on your circumstances.

How Student Loan Disbursement Works

Student loan disbursement is when your lender sends the loan amount to your school to pay for your tuition, room and board, and other education-related expenses.

How are student loans disbursed? Student loans are sent directly to the school in scheduled disbursements, usually at the start of the semester, trimester, or quarter. Funds are applied to your account to pay for tuition and fees, room and board (if applicable), and other institutional charges (if applicable).

Once the school applies the loan to those charges, any leftover money will be issued to you in the form of a student loan refund for you to cover any remaining educational expenses such as books and school supplies.

Does Student Loan Disbursement Time Vary by Loan Type?

How quickly you can get a student loan will vary by the type of student loan you’re seeking. Additionally, the process for applying for federal and private student loans differs. Understanding these differences could help you to better understand how quickly you can get a student loan disbursement.

How Long Does It Take to Get Federal Student Loans?

The first step in applying for federal student loans is completing the Free Application for Federal Student Aid (FAFSA). This is how you’ll find out about any federal merit-based scholarships or grants for which you may be eligible. Normally, once submitted, you should expect your FAFSA to be processed in about five days.

Once you’ve submitted the FAFSA, you should expect to receive a financial aid package that is customized to your needs in about three weeks. If the details look good, you’ll sign a Master Promissory note to make things official.

One thing not all borrowers realize is that most student loans aren’t disbursed immediately when they’re approved. Normally, federal student loans are disbursed a few days before the start of the semester. If you’re nearing the beginning of the semester and are concerned that your loans haven’t been disbursed, contact your lender for more information.

If you are a first-time borrower and haven’t taken out a student loan before, the following may apply before any money can be disbursed:

• You may have to wait 30 days after the first day of your enrollment period if you’re a first-year undergraduate student and a first-time borrower. Contact your school’s financial aid office to find out if this rule applies.
• You must complete entrance counseling if you’re a first-time borrower of a Direct Subsidized Loan or a Direct Unsubsidized Loan.
• You must complete entrance counseling if you are a graduate or professional student taking out a Direct PLUS Loan for the first time.

How Long Does It Take to Get Private Student Loans?

One of the differences between applying for private vs. federal student loans is that you won’t need to rely on the FAFSA. Instead, you’ll apply directly with your lender of choice. Many lenders, including ELFI, even allow you to prequalify to see what type of interest rate you could qualify for.

One benefit of prequalifying for student loans is that it normally doesn’t impact your credit score. Most lenders use soft credit checks for prequalification, then if you decide to move forward with the loan, they may require a hard credit check. Prequalifying for a student loan can help minimize the number of hard credit checks you’ll need.

How quickly you can get a private student loan depends on several factors. Often, it takes about three weeks for the funds to be disbursed after you’re approved. In other cases, though, receiving your private student loans can take much longer. It’s not uncommon for the disbursement process to take two or three months in slower cases.

How Long Do “School-Certified” or “Direct-to-Consumer” Loans Take?

School-certified loans are private loans that undergo a verification process with the chosen college before disbursement. When you’re approved for the loan, your school confirms things like your enrollment status and the estimated cost of attendance. Direct-to-Consumer loans are also private loans but are not verified by the school.

Private loans are either “school-certified” or “direct-to-consumer.” Both types have similar disbursement timelines, which often last between a few weeks and two months.

How to Check if Your Student Loans Were Approved

Federal Student Loans

Checking on the status of federal student loans is simple. You can view updates to the form by logging into your FAFSA account. If you’ve already been approved to receive federal student loans, then you can contact your lender for more information.

Private Student Loans

The easiest way to check the status of private student loans is to ask your lender. They can provide you with the most up-to-date information regarding your approval and disbursement timelines.

How Long Does It Take to Get a Student Loan Refund?

When your lender disburses your loans to the school, they’ll take out what you owe for tuition and fees. After that, if you have money left over for things like textbooks, they’ll send it back to you in the form of a student loan refund.

These types of refunds can take about two weeks to process. Keep this in mind when you’re planning your application timeline so that you have the funds you need to cover other educational costs.

Common Issues That Can Delay Student Loan Disbursement

If you are wondering why your student loans are taking so long to disburse, you should consider if you made any mistakes when applying for your loans. Common issues that can delay student loan disbursement include:

• Applying for additional funding, like private student loans
• Submitting the FAFSA at the last minute or with errors
• Failing to or incorrectly completing the loan agreement
• Failing to complete the required counseling on certain federal loans
• Not meeting the minimum number of required credit hours for your loan

Considerations When Taking Out Student Loans

Take time to make a plan before applying for student loans. Here are a few things to keep in mind:

• You can prequalify with several lenders to find out the types of interest rates for which you may be eligible.
• Be sure you understand what expenses your student loans can cover. Some student loans include limitations on how they can be spent.
• Keep in mind that your loans will accrue interest. Crunch the numbers ahead of time so you aren’t taking out more than you need.

What Happens When I Have to Start Repaying My Student Loans?

Before applying for loans, it’s crucial to think about the best way to repay student loans. After graduation, most students have a six-month grace period. The goal is to give you time to get established before paying back your loans.

During this time, familiarize yourself with your student loan terms so you‘ll know what to expect. If you have federal loans, you may want to explore options like Income-Driven Repayment (IDR) plans or Public Service Loan Forgiveness (PSLF).

If your financial situation improves or interest rates have dropped, then student loan refinancing may also be a good idea. You could lower your student loan interest rate and even choose a repayment term that better fits your needs.

Try ELFI’s Student Loan Refinancing Calculator to see what you could save.*

Pre-Qualify for Private Student Loans Today With ELFI

ELFI offers private student loans for college with no hidden or origination fees and flexible repayment terms.** With ELFI, you could also prequalify without hurting your credit score.

Once you apply for a private student loan with ELFI, you’re assigned a Student Loan Advisor who will be available to answer any questions you may have.

How long does it take to get a student loan disbursement from ELFI? After we receive your application and your documentation, we send the loan application information to the school for certification. Your school will verify your enrollment status, academic progress, and your financial aid package to confirm the amount of the loan.

Once the school has certified the amount, you must complete your application by accepting your loan terms, and then we will send the funds directly to your school on your behalf. This process may take up to two weeks to complete.

*Education Loan Finance is a nationwide student loan debt consolidation and refinance program offered by Tennessee based SouthEast Bank. ELFI is designed to assist borrowers through consolidating and refinancing loans into one single loan that effectively lowers your cost of education debt and/or makes repayment very simple. Subject to credit approval. See Terms & Conditions. Interest rates current as of 06-01-2022. The interest rate and monthly payment for a variable rate loan may increase after closing, but will never exceed 9.95% APR. Interest rates may be different from the rates shown above and will be based on the term of your loan, your financial history, and other factors, including your cosigner’s (if any) financial history. See Eligibility Requirements for more information. For example, a 10-year loan with a fixed rate of 6% would have 120 payments of $11.10 per $1,000 borrowed. Rates are subject to change.

**Education Loan Finance is a nationwide student loan provider offered by Tennessee based SouthEast Bank. ELFI is designed to assist students financially with receiving their education. Subject to credit approval. See Terms & Conditions. Interest rates current as of 06-01-2022. Variable interest rates may increase after closing but will never exceed 18.00%. Interest rates may also differ from the rates shown above. The term of your loan, financial history, and other factors, including your cosigner’s (if any) financial history can affect the interest rate. For example, a 10-year loan with a fixed rate of 7% would have 120 payments of $11.61 per $1,000 borrowed. Rates are subject to change.

student loans that go directly to you

Student Loan Disbursement

If you are using student loans to help cover the cost of your education, there are a few things you need to know about disbursement of loan funds.

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Student loans may seem simple on the surface, but borrowers may face some complexities during the financial aid lending process.

One of the biggest points of confusion among student borrowers is where the money goes after financial aid is approved. Disbursement of student loan funds is not as straightforward as receiving a check in the amount of your new loan. It involves much more than the lender simply handing over the cash to the student.

In this article, we go over what student loan disbursement is, how it works for both federal and private student loans, and some of the complications that can arise throughout the financial aid disbursement process.

On this page:

• What is Student Loan Disbursement?
• Federal Student Loan Disbursement
• Private Student Loan Disbursement
• Complications Related to Refinancing & Consolidation

What is Student Loan Disbursement?

Student loan disbursement is how a lender provides your loan proceeds—or the amount of the financial aid you are approved for—to the school for payment of qualified education costs. But it starts long before the loan money is handed over from one party to the next.

Student loan disbursement begins when you apply for student loans. The lender reviews your application details, either through the FAFSA or through a private lender application, and determines if you are a good fit for receiving student loan funds. 

For federal student loans, this is based on your enrollment, your dependency status, and your year in school. For private student loans, whether you’re approved during the application process relies heavily on your credit history, income, or whether a co-signer is available.

Once your application is approved, the funds are then transferred from the lender to the school, not directly to you or your bank account. This amount of money from a federal or private loan is used by the school to cover fees, including tuition, room and board, and other fees associated with enrollment.

The remaining loan amount is disbursed to the student borrower’s bank account. In many cases, the “excess” funds are used to cover living expenses, like rent, gas, and utilities.

While this is the general way student loan disbursement works, there are differences between federal and private student loans. The details below offer more insight into how student loans are disbursed if they are from federal or from private lenders.

Federal Student Loan Disbursement

Federal student loans are disbursed through the Department of Education, so there are several regulations in place to ensure a minimal amount of fraud or confusion.

The most popular federal student loans are Direct Loans, including Direct Stafford Loans and Direct PLUS Loans. When federal loans, such as Direct Subsidized or Unsubsidized Loans, are approved, the U.S. Treasury Department transfers the funds to the Department of Education. From there, the U.S. Department of Education sends the loan proceeds to the student’s university or college.

Once the school receives the money, federal student loan funds are then used to cover school-related expenses. Tuition and other fees are paid from the loan. If there is an amount left over, the student borrower receives these funds as a form of a refund. These funds are then used to pay for whatever the student needs, or paid back to the student loan servicer if not needed at all.

Once a federal student loan is disbursed, there is a 120-day timeframe where the loan can be canceled. If a student borrower cancels the loan within this period, there are no interest or fees associated with the loan.

Additionally, federal student loan disbursements come with other stipulations. For instance, first-year undergraduate students or first-time federal student loan borrowers must wait 30 days after the enrollment period begins before a disbursement is made. This rule is put in place by most colleges and universities, so check with your school to understand whether this delay applies to you.

Also, first-time borrowers must complete entrance counseling before they can receive the initial student loan disbursement. Entrance counseling is also a requirement for graduate and professional students who take out a PLUS loan for the first time. This process is completed online, but it is important that first-time borrowers go through with the brief requirement.

Private Student Loan Disbursement

Private student loan lenders handle loan disbursements differently. Each lender may have a different way that loans are provided after the initial application and approval process is complete. Private student loans are approved based on credit history, income, and cost of attendance. Once a student is approved for a loan, the process may involve a direct transfer to the student as a direct deposit into a bank account, or a school certification.

Direct-to-student, or direct-to-consumer, private student loans are disbursed to the student, not the school. The lender does not need to certify the loan with the school, but this puts the student in charge of using the funds to pay for fees and tuition in full. The borrower is responsible for making the necessary payments to their school’s financial aid office. 

The process for a school-certified private student loan works similarly to federal student loan disbursement. The lender approves the loan and then sends the proceeds directly to the school. The school confirms the student’s enrollment status and the anticipated graduation date, and in some cases, the cost of attendance. Schools can certify the loan as it is, or request changes based on the student’s status. This process can delay when the funds are received on behalf of the student.

Once the loan is certified, funds are then sent to the school. Tuition and fees are paid, and a refund check for the remaining balance is sent to the student from the school. In most cases, private lenders let students know when funds have been paid to the school. Then, they are aware that a refund check of the remaining amount should be on its way.

Students using private student loans should check with the lender to see if they require the certification process or if they should be expecting a check to cover the expenses of their education. The process is different for each lender, so learn these details in advance.

Complications Related to Refinancing & Consolidation

Although student loan disbursement through either private lenders or the federal government is fairly straightforward, complications can arise. This is particularly true when students refinance or consolidate their student loans to change their monthly payments. 

Loan disbursements from both the federal government and private lenders can take time when completing the refinance or consolidation process. It is up to the student borrower to ensure the funds make it to the intended destination on time and in full.

If a due date is missed during the refinancing or consolidation process, students may get hit with a missed or late payment on their credit report that is difficult to rectify. Be sure to check with your lender to understand the timeframe for disbursement when refinancing your student loans.

Bottom Line

If you are planning to use education loans, or if you are in the process of getting student loans, use this guide to understand your responsibilities as a borrower as well as the expectations you should have for loan disbursement.

The process differs between federal and private student loans, and among various private lenders. Misunderstanding who is paying who, in what amount, and when, can create more of a headache than necessary. Know what to expect from your lender in terms of the disbursement schedule once you are approved for a new student loan to minimize the stress.

student loan disbursement dates 2022

​​​​​Wondering when you’ll receive your financial aid? This page provides estimated disbursement dates for Dallas College ​for 2021-2022.

Have questions? Contact the Financial Aid Call Center​ for more information.

Please note:

• Financial aid award year dates are July 1, 2021, through July 30, 2022.​
• Dallas College begins the 2021-2022 award year in the Summer semester. This means a 2021-2022 financial aid application must be filed for Summer 2021 beginning May 14, 2021.
• If you are on financial aid Satisfactory Academic Progress (SAP) Suspension, you are not eligible for financial aid.
• In order to receive eligible funds, your financial aid file must be maintained as completed.

Summer Academic Semester 2021

• Payment period is May 14, 2021, through Aug. 22, 2021.
• Tuition could be paid as early as 10 days before your first class start. (View My Class Schedule on eConnect — login required.)

Fall Academic Semester 2021

• Payment period is Aug. 23, 2021, through Dec. 9, 2021.
• Tuition could be paid as early as 10 days before your first class start. (View My Class Schedule on eConnect — login required.)

Spring Academic Semester 2022

• Payment period is Dec. 10, 2021, through May 12, 2022.​​
• Tui​tion could be paid as early as 10 days before your first class start. (View My Class Schedule on eConnect — login required.)

Books and Supplies

Visit IncludED for more information.

Certification of Attendance

• The certification date for each semester is when we recalculate fund eligibility based on class attendance. This means you must be certified as attending your credit class(es) by your professors.

Refunds

• The refund process begins 10 days after the certification of attendance.  You will only receive a refund if you have remaining eligible funds due to you.  Visit the academic calendar for certification dates.

Federal Direct Loans

• Disbursement occurs upon eligibility.
• If you are a first-time borrower, your loans are disbursed into your college account 30 days after the semester start.
• If you are not a first-time borrower, your loans are disbursed into your college account 10 days after the semester start​.

Helpful Tips​

• Remember, your financial aid file must be completed and maintained as complete to receive eligible funds.
• Visit your Financial Aid Self Service portal on eConnect to ensure all checklist items are completed (in eConnect, go to the Current Credit Students menu, click on Financial Aid, then click on Financial Aid Checklist – login required).
• Be sure you have set up your eRefunds account.

what is a loan disbursement

Disbursement

What Is Disbursement?

Disbursement means paying out money. The term disbursement may be used to describe money paid into a business’ operating budget, the delivery of a loan amount to a borrower, or the payment of a dividend to shareholders. Money paid by an intermediary, such as a lawyer’s payment to a third party on behalf of a client, may also be called a disbursement.

To a business, disbursement is part of cash flow. It is a record of day-to-day expenses. If cash flow is negative, meaning that disbursements are higher than revenues, it can be an early warning of insolvency.

A disbursement is the actual delivery of funds from a bank account.

KEY TAKEAWAYS

• A disbursement is the actual delivery of funds from one party’s bank account to another.
• In business accounting, a disbursement is a payment in cash during a specific time period and is recorded in the general ledger of the business.
• This record of disbursements shows how the business is spending cash over time.
• Payments of dividends to shareholders are often termed disbursements.
• Student loan money paid into a school’s account on behalf of a student is termed a disbursement.

How Disbursement Works

In bookkeeping, a disbursement is a payment made by the company in cash or cash equivalents during a set time period, such as a quarter or a year. A bookkeeper records each transaction and posts it to one or more ledgers, such as a cash disbursement journal and the general ledger.https://f027e719d5741d9aeea5dfde109cdf20.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html

An entry for a disbursement includes the date, the payee name, the amount debited or credited, the payment method, and the purpose of the payment. The overall cash balance of the business is then adjusted to account for the disbursement.

Disbursements are a record of the money flowing out of the business and may differ from actual profit or loss. For example, a company using the accrual method of accounting reports expenses when they occur, not necessarily when they are paid, and reports income when it is earned, not when it is received.

The type of items listed in the ledger depends on the business. A retailer has payments for inventory, accounts payable, and salaries. A manufacturer has transactions for raw materials and production costs.

Managers use the ledgers to determine how much cash has been disbursed and to track it. For example, management can see how much cash is being spent on inventory compared to other costs. Since the ledger records the numbers of the checks issued, the managers also can see whether any checks are missing or wrongly recorded.

A disbursement is a cash outflow. It can be any form of payment.

Types of Disbursement

There are other, more obscure uses of the word disbursement, including the controlled disbursement and the delayed disbursement (also called the remote disbursement).

Controlled Disbursement

Controlled disbursement is a type of cash flow management service that banks make available to their corporate clients. It allows them to review and reschedule disbursements on a day-to-day basis. That gives them the opportunity to maximize the interest they earn on the cash in their accounts by delaying the precise time that an amount of money is debited from the account.

Delayed Disbursement

Delayed disbursement, also called remote disbursement, is deliberately dragging out the payment process by paying with a check drawn on a bank located in a remote region. In the days when a bank could process a payment only when the original paper check was received, this could delay the debit to the payer’s account by up to five business days.

The widespread acceptance of an electronic copy of a check in lieu of the original paper check has made this tactic hard to pull off.

Disbursement vs. Drawdown

A withdrawal from a retirement account is termed a disbursement. Once the money is disbursed, it is recorded on the account as a drawdown of the balance.

As noted above, a disbursement is a payment. A drawdown, however, is a consequence of a particular type of disbursement.

If you take money out of a retirement account, you receive a disbursement of money. That disbursement represents a drawdown on the balance in your account.

Say you’re a retiree, and you withdraw 10% of a $100,000 balance in a traditional IRA account. That $10,000 you receive is a disbursement from your IRA. It also represents a drawdown of $10,000, or 10%, from your account, which now has a balance of $90,000.

In general, a drawdown is a measure of a decline from a historical peak. A 10% reduction in the size of a military force might be described as a 10% drawdown of forces. An oil company that exploits 3% of its proven oil reserves will record a 3% drawdown of its supply.

Examples of Disbursements

While pursuing a legal case, an attorney must keep a record of disbursements made on behalf of a client. This may include payments to various third parties for costs incurred in the case, including court fees, private investigator services, courier services, and expert reports.

Properly documenting these costs is crucial in a legal case in order to make an accurate determination of the client’s losses and create an understanding of claimed damages. The attorney must notify the client and the insurance company before incurring high disbursement costs, and the client must reimburse the attorney.

Student Loan Disbursement

A student loan disbursement is the payout of loan proceeds on behalf of a borrower, who is the student. Schools and loan servicers notify students of the expected receipt of the disbursements in writing, including the amount of the loan and its effective date.

Federal and private student loans are generally disbursed two or more times during the academic year. The student receives a credit to pay tuition and fees and will receive any remaining balance by check or direct deposit.

Positive and Negative Disbursement

A loan disbursement may be positive or negative. A positive disbursement results in a credit to an account, while a negative disbursement results in an account debit. A negative disbursement may occur if financial aid funds are overpaid and later withdrawn from the student’s account.

Disbursement FAQs

Here are the answers to some commonly asked questions about disbursement.

What Is a Loan Disbursement?

A loan is disbursed when the agreed-upon amount is actually paid into the borrower’s account and is available for use. The cash has been debited from the lender’s account and credited to the borrower’s account.

Is a Disbursement a Refund?

In the lingo of the U.S. Department of Education’s Office of Federal Student Aid, a disbursement is the actual payment of the funds into an account that will support a student’s studies in the upcoming semester. If the loan amount exceeds the actual costs of tuition and fees, a refund of the excess is paid directly to the student.¹

What Is the Difference Between a Disbursement and a Payment?

A disbursement is a payment. The word disbursement implies a payment that has been finalized. That is, it has been properly recorded as a debit on the payer’s side and a credit on the payee’s side.

What Is a Disbursement Fee?

A disbursement fee is usually a vendor’s charge to cover payments made by the vendor in the course of its work on behalf of a customer. For example, FedEx may pay duty and tax charges for a shipment on behalf of a customer, and then add a disbursement fee to its bill to the customer to cover the payments.²

The Bottom Line

A disbursement is a payment that has been completed and recorded as such. That is, it has been debited from the payer’s account and credited to the payee’s account.

In business, the regular recording of all disbursements of cash is a crucial method of keeping tabs on the expenditures of the business.

In the wider world, the word disbursement is used in a variety of contexts, from the crediting of student loan money to the finalization of a withdrawal from a retirement account.Compete Risk Free with $100,000 in Virtual CashPut your trading skills to the test with our FREE Stock Simulator. Compete with thousands of Investopedia traders and trade your way to the top! Submit trades in a virtual environment before you start risking your own money. Practice trading strategies so that when you’re ready to enter the real market, you’ve had the practice you need. Try our Stock Simulator today >>