Are Student Loan Funds Sent Directly to the Student or the School?

Everyone knows student loans are used to fund your higher education, but how exactly does the distribution of money work? Are your federal or private student loans disbursed directly to student, or is it sent to your school instead?

A student holding money.

So are federal or private student loans disbursed directly to the student or to the school?

Well, it depends. Most financial aid—including scholarships, grants, work-study paychecks, and loans—will go directly to the school, where it’s applied to your tuition payments, college fees, on-campus housing payments, and more. Once all outstanding college expenses are paid for, those funds can be transferred to you for everyday living expenses.

That being said, some scholarship or loan options will let the funds go directly to you, the student. Many find this ideal since they can determine what they do with the funds. Others find that sort of control a bit too tempting to spend the money on more superfluous things—which is exactly why so many financial aid sponsors opt to send directly to the school in the first place.

So, in short, both options are out there, but more than likely the money will be sent directly to your school instead of your own bank account.

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

 

Lender Rates (APR) Eligibility
Sallie Mae logo.
1.13% to 11.23%1 Variable
3.50% to 12.60%1 Fixed
Undergraduate and Graduate
VISIT SALLIE MAE
Credibe company logo.
1.04% to 13.19% Variable
3.00% to 14.14% Fixed
Undergraduate and Graduate
VISIT CREDIBLE
Lendkey company logo.
1.49% to 7.64% Variable >800 FICO
3.99% to 7.64% Fixed
Undergraduate and Graduate
VISIT LENDKEY
Ascent company logo.
1.82% to 11.32% Variable
3.27% to 12.46% Fixed
Undergraduate and Graduate
VISIT ASCENT
College Ave company logo.
0.99% to 11.98% Variable
2.94% to 12.99% Fixed
Undergraduate and Graduate
VISIT COLLEGE AVE
3.47% to 6.11% Variable
4.60% to 7.40% Fixed
Undergraduate and Graduate
VISIT ISL
Earnest company logo.
1.04% to 11.44% Variable
3.34% to 12.78% Fixed
Undergraduate and Graduate
VISIT EARNEST
1.20% to 11.59% Variable
3.31% to 11.99% Fixed
Undergraduate and Graduate
VISIT ELFi
1Variable interest rates start from 4.12% APR to 10.98% APR. We also offer fixed interest rates from 5.74% APR to 11.85% APR. Click here for important information. Terms, conditions, and limitations apply.
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.

Leave a reply

Your email address will not be published. Required fields are marked *