How Long Does It Take to Get a Student Loan?
Understanding the timeline regarding getting student loan money is important. This article will help you navigate what you're timeline likely looks like.
After receiving your acceptance letter (and celebrating, of course), you’re probably wondering how the financial aid process works. Specifically, how long it’ll take to get a student loan.
After all, knowing exactly when you’ll receive the much-needed money will determine which type of student loan you ultimately go for. It’s also helpful to know rough estimates so you can plan on applying for student loans well in advance.
How long does it take to get a student loan?
The type of student loan you apply for will determine how long it will take. Federal student loans are funded by the federal government and offer a myriad of options, including eligibility for grants. For this reason, most college-bound students fill out the Free Application for Federal Student Aid, or FAFSA whether or not they choose this route.
You may have heard stories from other folks mentioning filling out the FAFSA is a tedious process, but rest assured it’s a lot simpler than it appears. Even if you don’t think you qualify, taking the time to fill it out will help you understand your federal loan options, plus eligibility for programs such as work-study or federal grants.
Seriously, who doesn’t want free money?
As for how long it takes to get a federal student loan, it’ll depend on how you submit your FAFSA application — you can submit one electronically or via regular mail. Once it’s submitted, you’ll then find out the types of aid, and how much you may qualify for in about two weeks. The good news is that if you submit your form electronically, you may see this information in as little as a few days.
Keep in mind that you won’t receive the loan proceeds right when you’re approved. You’ll need to work with your college’s financial aid office to be able to receive your federal aid package. This process will take some time since the college may also look at your eligibility for school-based aid and other information they may need from you.
It’s safe to assume that it’ll take at least a few weeks or months from when you submit the form to when you’ll officially receive your student loan.
How long does it take to get a private student loan?
Private student loans don’t have the same timelines as those set by federal student loans.
Plus, these types of lenders have their own set of rules when it comes to approving loans, so the process may look different for each one.
Since there’s plenty of competition out there, private lenders set different payment plans and interest rates to get you to sign up. In most cases, you may be able to finish the application process and get your funds much quicker compared to federal loans. A few weeks is a good estimate depending on the lender’s application processes and how it works with your college.
If you need a student loan fast, a private lender may be a good choice. However, you’ll want to shop around to find the right loan based on your individual needs.
How long does it take to get a student loan disbursement?
For federal student loans, the type of financial aid you opt for will affect how long it takes.
You’ll need to wait on your college to receive your funds — yup, they’re the ones ultimately in charge of the money.
Students who receive grant or loan funds will get them in at least two separate disbursements, or payments. Depending on the college, you’ll get a student loan disbursement at least once a term. You may also have to wait 30 days after your enrollment date if you’re a first-time borrower. It’s a good idea to check with your college to see if this is the case.
Some federal loans, like a Direct PLUS loan, students may need to complete entrance counseling before receiving the loan disbursement. Counseling takes around 30 minutes and once complete, documentation will be sent to your college.
If you receive financial aid and need it to purchase course materials like textbooks, colleges will provide a way for you to purchase them 10 days before your term starts. Some colleges may offer you a voucher, for example, if the disbursement isn't complete before that time.
As for private student loans, the process will vary between lenders. You’ll be subject to a school certification, which means your college’s financial aid office will verify your loan details and enrollment status so that you’re not borrowing more than your cost of attendance. Afterwards, your school will schedule the date of your disbursement, and in what amount.
How long does it take to get a student loan refund?
Your college will take your student loan funds to first go towards your fees, tuition, and any expenses if you live on campus. If there’s money left over, you’ll be eligible for a loan refund. This money will be paid directly to you to go towards your college expenses, such as books, course materials, and even technology like a laptop.
As for when you’ll receive it, it generally happens at the beginning of each semester and as soon as your college applies your financial aid towards those initial expenses. You can request your school pay you directly to your bank account or on your student account (such as for a meal card).
If you find that you don’t need your student loan refund, it’s important that you return this portion by canceling that portion of your student loan. You’ll want to contact your financial aid as soon as possible.
For federal student loans, you will need to cancel it within 120 days or receive it. Private lenders are another matter — better to check the fine print before you sign the dotted line.
Getting Your Student Loan
When it comes to getting your student loans, understanding how long it takes is important so you can budget accordingly. For instance, if you need money for books and other supplies, you may want to have some money around if your loan isn’t disbursed on time.
While federal loans are great, taking out a private loan can be a great choice if you need a loan faster. Whichever avenue you choose, carefully weigh the pros and cons of your decision so you’ll know exactly what you’re getting into.
Juno can help you to find a student loan or refinance a loan at the most competitive possible rate. We get groups of buyers together and negotiate on their behalf with lenders to save them money on private student loans and private student loan refinance loans.
Sarah Li Cain
Sarah Li Cain is a finance writer and a candidate for the Accredited Financial Counselor designation whose work has appeared in places like Bankrate, Business Insider, Financial Planning Association, Investopedia, Kiplinger, and Redbook. She’s the host of Beyond The Dollar, where she and her guests have deep and honest conversations about money affects their well-being.
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