When Does the Loan Money Come?
Dear Betsy,
I am starting my first year at school, and I am moving into my apartment next week. My school just told me that because I am a freshman, I cannot get my loan money until the beginning of October. Is this legal? I need the loan to pay my rent.
Thank you,
Cynthia
Dear Cynthia,
Federal law requires that first-year undergraduates who are first-time borrowers of federal student loans may not receive the first disbursement of their loan until almost a full month into the school year.
This rule was put into place because freshmen are the students with the highest likelihood to drop out, and many of those students end up defaulting on student loans taken out for only a brief period spent in school.
You may want to see if your landlord will offer you an extension based on a letter from your school showing that the loan money is indeed coming and stating when it will be available to you. You will also want to check with your school’s financial aid office or bursar to make sure that some of the loan money is going to come to you for your living expenses, rather than being used in full to pay for your tuition and fees.
Regards,
Betsy
