FAQs
Federal loan funds that are returned within 120 days of disbursem*nt will have all origination fees and accrued interest negated off of the amount returned. Returning monies this way will directly reduce the principal of the loan.
Can you return unused FAFSA money? ›
How to Return Unused Funds. If you are returning federal student loan funds, notify your school's financial aid office within 120 days of the disbursem*nt date, as each school may have a slightly different process. You should not be charged interest or fees on any loans canceled within the 120-day timeframe.
What if I don't use all my student loan money? ›
Leftover student loan money might feel like a windfall, but it's really not. Remember—you borrowed that money and you'll have to pay it back with interest when your loan is due. Consider sending the leftover funds back to your federal or private student loan servicer as a loan payment.
What do I do with leftover FAFSA money? ›
Any money left over is paid to you directly for other education expenses. If you get your loan money, but then you realize that you don't need the money after all, you may cancel all or part of your loan within 120 days of receiving it and no interest or fees will be charged.
Can I get money back if I paid my student loans? ›
In most cases, you'll get a refund for any overpayments beyond 20 or 25 years. The extra payments made on forgiven loans will be refunded back to the most recent of these three dates: The date you reached the required number of payments for IDR forgiveness – 20 or 25 years of monthly bills.
What happens if you don't use your FAFSA money? ›
After all the bills at the school are paid, however, there might be money left over. In that case, your school's financial aid office or bursar's office will refund the money to you in a separate disbursem*nt. The office may send you a check, or the money might be deposited in your checking account.
How do I cash out my FAFSA money? ›
Here are the 3 ways you can ask to receive your refund:
- Direct deposit: Direct deposit lets your school electronically send the money straight to your bank account. ...
- Physical check: Your school will mail you a physical check. ...
- Student account credit: Some schools might let you leave the refund as a credit on the account.
The FAFSA is your application for federal financial aid. Some types of aid you receive through the FAFSA, like grants or scholarships, do not need to be repaid. However, federal student loans received through your FAFSA do have to be repaid with interest after you graduate or leave school.
Can I spend my FAFSA refund on anything? ›
Your Financial Aid refund can be used towards any education-related item listed in the cost of attendance such as such as books, transportation, housing, food, and miscellaneous expenses. This also means you are solely responsible for budgeting this refund throughout the semester.
Can you use FAFSA money to buy a car? ›
You also can't pay for the purchase of a car with financial aid funds. In particular, a qualified education loan is used solely to pay for qualified higher education expenses, which are limited to the cost of attendance as determined by the college or university.
The student loan refund is not taxable on your federal return. While all federal student loan forgiveness is temporarily tax-exempt at the federal level, this is temporary under the provisions of the American Rescue Plan Act of 2021.
Can you get cash back on student loan payments? ›
Most rewards cards would only offer 1 percent cash back on student loan payments, since student loans don't fall into traditional bonus categories, but flat-rate cards will offer 1.5 to 2 percent. The Citi Double Cash® Card is a good example.
What if I paid off my student loans during COVID? ›
No, you can no longer get refunds for payments you made during the COVID-19 payment pause. The refund benefit ended on Aug. 28, 2023. Prepare for student loan payments to restart.
Do I have to return FAFSA money if I drop out? ›
Federal financial aid regulation states that if you withdraw from all of your classes or cease enrollment prior to the 60 percent point of instruction in any term, you will be required to repay all unearned financial aid funds received. A calculation will be performed to determine the repayment amount.
Can you spend FAFSA money on anything? ›
Federal student aid from the Department of Education covers such expenses as tuition and fees, housing and food, books and supplies, and transportation. Aid can also help pay for other related expenses, such as a computer and dependent care.
Can FAFSA ask for money back? ›
The type of aid you receive after filling out the FAFSA determines if you need to pay it back. Grants, scholarships, and work-study money don't need to be repaid but have finite funding limits. You will need to repay subsidized, unsubsidized, and Direct Plus Loans.
