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Getting to know your student loan: When will I get my loan funds?

For many college students, taking out student loans is a necessary part of your college payment strategy. But are you wondering exactly how this whole “borrowing money for college” thing works? After all, this may be the first time you’ve ever taken on any kind of debt.

The good news: Dealing with student loans is actually a lot easier than you think. “Your chosen college will really guide you through the whole process of signing up for your loans and making sure they’re available to you when school starts,” explains Joe Statuto, market relationship manager for Wells Fargo Education Financial Services.

Here’s the rundown on some FAQs when it comes to student loans and when you get them.

What’s the first step to get my loan?
Your school will send you a financial aid package that lists federal student loans for which you’re eligible. You’ll let your school know if you accept the loans by a set deadline.

Your loan servicing company will contact you before the start of your freshman year. You’ll typically need to sign a Master Promissory Agreement. You’ll also go through a short online loan education “class” at studentloans.gov.

If you take out private loans — through a bank, for example — you’ll need to contact them directly, get approved, and sign loan forms. The private lender will communicate with your school each semester to verify that you’re actually enrolled.

When will my loan money arrive? And where?
Federal and private loan funds are typically sent directly to your college. Your loan money will arrive in pieces, not all at once. If your school runs on a two-semester system, you’ll likely get half of your loan money when the fall semester starts and the other half when the spring semester begins.

Loan funds usually arrive at your school a few days after the school sends out your bill for the term.

If there’s any loan money left after your school’s “direct costs” (tuition, fees, and room and board) are paid, your school will cut a check and refund the remainder to you. But it’s not fun money to spend however you want — you will eventually have to pay it back. In fact, you can consider turning the money back in to your lender or taking out a smaller loan next year. “My biggest piece of advice is to only borrow what is needed rather than what [students] are eligible to receive,” says Statuto.

How do I know my loan arrived at my school and was applied to my account?
You should be able to view your school’s billing account online. There you’ll see what your school is billing you for the term. You should also see your loan funds being subtracted from your bill. If you don’t see your loan money listed on your account, talk to your financial aid office. They’ll contact your loan servicing company.

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Dana Fulton
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Dana Fulton

Social Media Content Manager at Wells Fargo
Creative professional with years of sales and marketing experience, specializing in segment-specific strategy and customer-centric communications. Skills include problem solving, collaboration, critical thinking, and clarifying the complex.
Dana Fulton
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