Loan Disbursement + Interest Rates

Discuss various money matters here. Loans (federal and private), scholarships, lottery winnings, or other school finance related information and queries.
HyeMart
Posts: 227
Joined: Wed Jan 13, 2010 3:43 pm

Loan Disbursement + Interest Rates

Postby HyeMart » Sun May 22, 2011 4:52 am

I've never had education loans before and I have no idea how it works and can't find anywhere that explains what I'm asking.

I hastily accepted all the loan offered by my school, I probably won't use it all. I was wondering if I would be given all the money up front and then interest will accrue, Or I could pick and choose what loan to draw from and times goes on. E.G. though I did accept the total amount of gradplus at the end of the year, I did not use it.

Does the school give me all the money automatically? Or is the total amount what I could draw from if I needed it (and If I took from it then I would have to pay it).

Gideon Strumpet
Posts: 220
Joined: Wed May 18, 2011 10:31 am

Re: Loan Disbursement + Interest Rates

Postby Gideon Strumpet » Sun May 22, 2011 5:21 am

They deduct all tuition and fees from your amount allocated to each term, and then give you one payment up front of any remainder. Usually you get it on or before the first day of class. With PLUS loans, the interest begins to run from the day you get your disbursement, but you do not have to make any payments until after you graduate. If you find that you do not need the full amount, you can write a check back to the school which will reduce the balance you borrowed. If you want to do that, contact your financial aid office to see what the deadline is for making a return of excess funds.

One thing to keep in mind, however, is that it's likely you won't have a paying job in your first summer, since they're quite hard to get for most 1Ls (unpaid jobs are easy, and you can get great unpaid legal work, if you are prompt and diligent in your job search; it's just hard to find legal work that pays). Also, the student budget and your loan funds are calculated to cover cost of living only during the 9-month academic year. If you are frugal and don't need all your loan money during the school year (which is good, and a smart way to be), you may still want to hang onto the excess, in order to cover yourself for those summer months when you will likely have no income, but still need to eat and pay rent.

HyeMart
Posts: 227
Joined: Wed Jan 13, 2010 3:43 pm

Re: Loan Disbursement + Interest Rates

Postby HyeMart » Sun May 22, 2011 2:08 pm

could I accept the amount later so that less interest acrues?

Gideon Strumpet
Posts: 220
Joined: Wed May 18, 2011 10:31 am

Re: Loan Disbursement + Interest Rates

Postby Gideon Strumpet » Sun May 22, 2011 2:36 pm

HyeMart wrote:could I accept the amount later so that less interest acrues?

I think the answer is no; schools don't generally have a process for deferred or installment disbursements. I think the terms of the loan also may require disbursement at a certain time. Pretty sure you're limited to taking it all up front, and giving it back by a certain date if you find you don't want it all. Like I said though, chances are you will want it at some point; if not right away, then at least for the summer.

I think there is a process in general to ask for a loan amount increase over your initial request, if your request was below the total student budget to start with. You would have to ask for less than the total and then ask for more later if you need it; but you will still get everything you asked for in one lump sum up front. Check with your school on how to request an increase and the deadline to do it for the current lending year.

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vanwinkle
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Joined: Sun Dec 21, 2008 3:02 am

Re: Loan Disbursement + Interest Rates

Postby vanwinkle » Sun May 22, 2011 2:49 pm

I have known people who initially requested to receive less than the full offered amount and then got the rest disbursed later after deciding they need it. For a specific school you should ask the financial aid office about this, but I do know it's possible.

HyeMart
Posts: 227
Joined: Wed Jan 13, 2010 3:43 pm

Re: Loan Disbursement + Interest Rates

Postby HyeMart » Sun May 22, 2011 4:03 pm

thanks, this was helpful




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