How Money Gets to the School

In most cases, you’ll never handle the proceeds of your student loans. Find out where it goes instead.

Financial Aid Disbursement

What is disbursement and how does it impact me?

When it comes to the specifics of how student financial aid funding is handled, you should know that most forms of student financial assistance are not disbursed directly to the student, but rather sent to your school, generally by electronic transfer. Student loan and financial aid disbursement takes place at the beginning of each class period, either semester or quarter, and is credited to your student account against your tuition bill.

Where there is an overage, generally a small difference between what you owe the school for tuition and room and board and the loan amount, that money is made available to you in the form of a financial aid or student loan disbursement check or credit. Generally, students use this for living expenses or to purchase books.

The exceptions to direct financial aid disbursement are direct-to-consumer loans from banks and other private lenders. But even in the case of many private loans, the school you're attending must certify your enrollment. In addition, they must confirm the fact that the amount you're borrowing is not more than your cost of attendance, less any other financial assistance you're receiving.

But even when you never see the funds yourself, your school has certain reporting obligations to you when it receives loans supporting your education. The school must notify you whenever a loan payment has been disbursed, and that formal notification must carry certain other information, such as the date and disbursement amount, and your rights—if any—to cancel the loan, and the process by which you would do so.

Learn more about affordable choices for college student loans

For more student loans resources about entrance and exit counseling and your Master Promissory Note, we have the information you need. If you are looking for additional student borrowing options, learn about our affordable school certified Charter One TruFit Student Loan™. If you still have questions, call a student loan specialist at 1-800-721-3969, and we'll help walk you through the process.

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