College Financial Aid Disbursement: When and How to Expect It

As the start of classes nears, students who need help paying for school may wonder how college financial aid disbursement works as they wait for their award to arrive.

College financial aid disbursement refers to the aid payment process, which typically happens around the time classes start in the form of a credit to the student’s account.

Experts say the process is often a seamless one, but there are some steps students can take to avoid a delay in receiving their financial aid. It’s important for students to contact their financial aid office if their award is late or doesn’t match the amount listed in their financial aid package, they add.

When Is Financial Aid Disbursed?

The exact date of a student’s financial aid disbursement depends on the specific college he or she attends.

“Financial aid is disbursed based on the start of classes or term dates,” Jennifer Ruiz, a Sallie Mae spokesperson, wrote in an email. “Colleges and universities set the disbursement date, and disburse aid no more than 10 days prior to the start of the term.”

The disbursement date can also depend on the type of aid awarded. For example, a student who relies on federal student loans to pay for college may not see those loans disbursed until 30 days after classes start if the individual is a first-time student at certain colleges, says Shannon Vasconcelos, director of college finance at Bright Horizons College Coach.

How Is Financial Aid Disbursed?

Federal financial aid and institutional financial aid are disbursed in the form of a credit to the student’s account.

Outside aid, like that in the form of a scholarship from a private company, is disbursed differently from organization to organization and may come in the form of a check mailed to the student or credit to the student’s school account.

Sometimes, disbursement will lead to an additional credit in the student’s account. In these cases, colleges issue a refund.

“Disbursed federal financial aid will cover billed tuition, fees, room, and board for the semester, and then excess is automatically issued to the student or parent as a refund,” Vasconcelos wrote in an email. This is often in the form of a check or deposit to the bank account on file.

[Read: What You Need to Know About College Tuition Costs.]

What Causes Delays in Financial Aid Disbursement?

Financial aid disbursement can be delayed for a number of reasons.

“One of the most common reasons aid might be delayed occurs when a family is missing documentation or additional information to confirm aid eligibility,” Ruiz says.

“To avoid potential delays, it’s important that families meet all deadlines and submit all requested documentation in a timely manner,” she says, noting that completing the Free Application for Federal Student Aid, or FAFSA, by the college’s deadline is critical to receiving aid on time. According to Sallie Mae’s How America Pays for College 2020 report, 16% of families say one of the reasons they didn’t file the FASFA for the 2019-2020 academic year was because they missed the deadline.

[Read: FAFSA Deadlines You Should Know.]

Other reasons for delays in disbursement include failing to complete steps like signing the student loan promissory note, participating in student loan entrance counseling or providing some verification documentation, Vasconcelos says. She also notes that colleges need time to review applications, confirm details about a student and their requested loans, and process disbursements — which may be especially true this year due to the spread of COVID-19, the disease caused by the novel coronavirus.

“This summer, college financial aid offices have been flooded with an incredible number of appeals for additional assistance due to COVID and its associated economic impact,” Vasconcelos says. “Aid offices may be more behind than usual, so students and parents should make sure they’re taking care of their end of arrangements well in advance to give a little grace to aid administrators if they want to avoid delays.”

[Read: How Financial Aid Appeals Work Due to Coronavirus.]

Can Students Get Help Before Aid Is Disbursed?

Students shouldn’t expect to receive their aid until around the time classes start, or maybe a few weeks after. They may have expenses come up in the summer prior to that time, such as textbooks, laptops and other back-to-school items.

To help with this, a small number of colleges may be able to provide a small surplus of aid early, says Nat Smitobol, an admissions counselor at IvyWise, an educational consulting firm in New York.

“It’s not written into a financial aid package, but I’ve had students who attend schools that are able to provide additional funds for students from the lowest socioeconomic brackets, money added in that’s disbursed differently,” Smitobol says. “At some schools you have to go in and talk to the financial aid office and ask; at other schools it’s just a given — possibly something like a $2,000 surplus.”

Since it’s likely most schools won’t be able to provide support before the typical disbursement date, experts suggest students save up during the remainder of the summer in anticipation of paying in cash upfront for necessary items before classes start.

Trying to fund your education? Get tips and more in the U.S. News Paying for College center.

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