What Are Financial Aid Refunds?

Portrait of a hand holding 4 twenty dollar paper bills.

Flickr user Amy Jutras

Financial aid refunds are refunds that are given to students when the amount of loan given to a student is more than what the student needs for the cost of education.

Here’s how it works.

The FAFSA and Financial Aid Packages

After you submit your FAFSA, you will receive a financial aid award letter. This letter gives you the breakdown of your financial aid package. Once you accept the package, your loan servicer will transfer the loan amount to the college you are enrolled in.

If your circumstances change between the time you accept the financial aid and the beginning of the semester, your financial aid package may be adjusted to reflect the change. For example, you may have won a few more scholarships outside of the college sponsorship or the school may decide to ask students to pay separately for something that was initially included in the cost of attendance. Whatever the reason, if the loan amount disbursed to the college exceeds your stated need, you will get a financial aid refund.

Financial Aid Refunds

This amount that you receive as a financial aid refund may be paid as a check, credited to your account or deposited into your bank account directly. You can accept the money and use it for whatever you want. This is still considered as money loaned to you and it will attract interest. A better idea is to request that it be returned to the creator. If you decide to accept it, you should make sure that you spend it only on school-related items such as books or on memberships.

Use College Raptor’s new Student Loan Finder to discover personalized loan options. Compare lenders and interest rates to find the ideal student loan—for FREE!

 

Lender Rates (APR) Eligibility
Citizens logo.
5.89%-16.51%* Variable
3.99%-15.61%* Fixed
Undergraduate and Graduate
VISIT CITIZENS
Sallie Mae logo.
5.54% - 15.70% Variable
3.99% - 15.49% Fixed
Undergraduate and Graduate
VISIT SALLIE MAE
Credibe company logo.
5.00% - 17.99% Variable
3.59% - 17.99% Fixed
Undergraduate and Graduate
VISIT CREDIBLE
Lendkey company logo.
6.00% - 13.75% Variable
3.99% - 13.75% Fixed
Undergraduate and Graduate
VISIT LENDKEY
Ascent company logo.
6.00% - 15.21% Variable
3.59% - 14.16% Fixed
Undergraduate and Graduate
VISIT ASCENT
3.70% - 8.75% Fixed
Undergraduate and Graduate
VISIT ISL
Earnest company logo.
5.62% - 16.85% Variable
3.69% - 16.49% Fixed
Undergraduate and Graduate
VISIT EARNEST
5.00% - 14.22% Variable
3.69% - 14.22% Fixed
Undergraduate and Graduate
VISIT ELFI
College Raptor is not a loan lender and does not assume responsibility for suggesting a loan to a user who may not be eligible for it. Rates, terms, conditions, eligibility, approval, and other considerations are the decisions of the lenders and may vary depending on which lender or marketplace the user selects. We urge users to carefully consider and review all loan options and terms before committing to taking out a loan.

Subscribe to Our Newsletter

Join thousands of students and parents learning about finding the right college, admissions secrets, scholarships, financial aid, and more.