Where Is My Financial Aid?

Q: What is taking so long??? I applied for financial aid and a student loan, but my school has not received any of the funds. Where is my financial aid? Where is my student loan money?

A: This is a very common question because there are many steps to the financial aid process.

Also, if you are a freshman student, it is possible that your school HAS received your student loan funds. In some cases, your school might choose not to release your student loan funds immediately.

Many schools will release your loan funds immediately, but some schools have been known to hold these funds for up to 90 days before applying the money to your account.

Why? Some schools prefer not to release student loan funds immediately because so many freshman students fail to attend or drop out early. By waiting to release the loan funds, the school can easily return the loan funds to the lender if necessary.

IMPORTANT: According to federal rules, your school MUST inform you with three (3) days of receiving your loan funds. So, while the funds may not be released immediately, your school must let you know that funds have arrived.

If you think your financial aid office is not releasing your student loan funds in a timely manner, call them and find out what is going on.

Here is how the financial aid process is supposed to work:

1. Complete the FAFSA: First, students must complete the FAFSA (or Free Application for Federal Student Aid). This form requires that you submit income information for both you and your parents. The FAFSA will also ask for the list of schools that you are considering attending.

2. Receive Your SAR: Once your FAFSA is approved and fully processed, the Department of Education will send you and your schools a Student Aid Report (SAR). Schools will use the SAR to determine the amounts and types of financial aid that you are qualified to receive.

3. Respond to Your Award Letter: Next, each of the schools that approve your admission request will send you an Award Letter. The Award Letter will outline all of the financial aid you are being offered. From the Award Letter, you can indicate which parts of the aid package you want to accept.

4. Complete Your MPN: If you accept a federal student loan (such as a Stafford or Perkins loan) as part of your award package, you will also need to complete a Master Promissory Note (or MPN). This is a contract that serves as your promise to repay your student loans.

Some schools receive Stafford Loans from private lenders, and others receive Stafford Loans directly from the federal government in a program known as Direct Lending. So depending on your school, your Federal Stafford Loan will either be offered by a private lender like a bank, or directly from the Department of Education.

5. School Certifies Your Loan: Keep in mind that your Stafford Loan funds will not disburse to until your school verifies your enrollment. So once your Master Promissory Note has been completed, signed, and processed, your Stafford Loan provider will send a Certification Request to your school. The school must approve this request and certify your student loan.

6. Funds Are Sent to School: Once the certification is received by the lender, funds will be sent to the school. This fund transfer usually happens electronically.

7. Funds Are Applied to Your Account: After your school has received your student loan funds, the funds should be applied to your account after 30 days. This holding period allows the school to return the loan funds if you fail to enroll or drop out of classes.

If more than 30 days have passed since you completed your Master Promissory Note and your loan funds have not been applied to your account, you should touch base with your financial aid office and make sure that there are no problems.