I am going to school and have been awarded student loans. I’ve already applied them to my college but there is a balance remaining in the loan. I’d like to reject that balance so I don’t have to pay it back later, as I don’t need it for living expenses.
For the life of me, however, I can’t figure out how to do this! Can anyone help? Is this something the school would help me with or the student loan center itself?
I’d start with a financial aid counselor at the school. If they can’t help, they can likely point you in the right direction.
Find out who the creditor is and write them a check. If you don’t know who that is, see post #2.
What I did in the same situation was disburse the entire loan, then take the leftover I-don’t-need-for-living-expenses money and make an immediate payment to the loan.
Maybe there’s a more graceful way to go about it but that got the job done with very little bother to myself.
I e-mailed them as well as the student loan place too. I will try to call them when I have a private moment (unfortunately I have no door to shut to make a private call).
I was just hoping someone knew the answer.
Well, last year when I wanted to reverse my student loan, I logged in to the student loan provider’s website, found my loan and clicked ‘‘Cancel.’’ I thought it was for a loan I hadn’t yet received, but it turned out I had unwittingly canceled last year’s loan for a much larger sum - and the full balance was due immediately. :eek: It couldn’t be reversed. I was not eligible to take out any more loans. I could not attend school without first paying the balance. I would have had to drop out that academic year if we hadn’t had several thousand dollars in savings that allowed us to pay the full balance immediately. Heed my hard-won advice - find someone at the financial aid office who knows what they are doing. Trial and error is not the solution.
:eek: Ok, yes, I’ll call the financial aid department tomorrow. If worse comes to wort, I’ll do what others have said and use the first check to immediately pay it off.
Do you have a website where you register for classes, update your info, look at your grades, etc? Ours is called “Banweb.” Anyway if you look there in the financial aid area, you should see a thing about accepting your award that you have to do anyway. There you can reject, accept, or accept a lesser amount. If you don’t have this there will at least a paper you have to sign for the financial aid office accepting the award. You should have the same options there.
I think I accepted the whole amount. I mean, I’m sure I did, because as I said, some of it has already been applied to my school fees. I think I’ll just drive over there tomorrow and ask them.
If you’re talking about Stafford subsidized loans, you won’t be charged any interest while you’re in school.
What type of loan is it?
I’d just do like was stated above and make an immediate payment at the loan collections office of your school. That is depending on where the loan came from. Our office only handles certain types of loans. If the loan came from a source other than the school, such as a bank, you would have to make the payment there. Most students receive several types of loans and you have to figure out where each came from to be able to pay the correct people.
On the UConn student admin site, it says this about my financial aid:
“You have already accepted, declined or reduced all of your financial aid awards. You may not make any further updates via the Student Administration System. If you would like to make a change to any of your awards, please contact the Office of Student Financial Aid Services in writing.”
The fall funds have already disbursed but the spring doesn’t disburse until 1/14/13. Apparently once disbursal starts for the year, you can’t make any changes yourself. I’m not 100% positive but I’m pretty sure that I could have changed it 2 weeks ago.
So, yeah…what everyone else said - talk to the financial aid people. 
oh and WELCOME BACK TO SCHOOL!!!
Anyone wanna do my calculus homework for me? 
Don’t just blindly reject this loan or apply the money to the current loan without thinking - if you have other student loans, car payments, etc, make sure you apply the extra money to pay off the highest interest, unsubsidized debt first.
IE if you have car loans pay those down first, then private student loans, then unsubsidized loans, then subsidized loans, etc
Not that they would likely find out, but isn’t it illegal to use student loan funds on non-educational expenses? How kosher would it be to pay off your car note with your loan disbursement? If you used it for transportation to and from class, I guess it’d be restroactively justifiable (if it ever even came up, which is unlikely of course), but there’s definitely a gray area.
Anyway my point is, student loan disbursement funds aren’t the same as free money. You’re not just allowed to apply it to whatever debt you want, or invest it however you like.
At my school they distribute the remainder about two months after they apply the money to books and tuition. As long as you contact the financial aid department at the school before the money is distributed to you, you can refuse the balance of the loan. You will still get the full amount next semester unless you change the amount requested to an estimate of what you think you will spend and only ask for that amount.
You are allowed to use it for living expenses, which includes rent/mortgage payment, utilities, food, transportation, electronics…pretty much anything. Maybe not new boobs, but pretty much anything else would be ok.
I don’t have any car payments or any other loans. I made very sure to be completely (ok 99%) out of debt before I did this. I have a credit card that carries no balance month to month and we have a little communal debt (less than $1000) so I really have no use for it. I mean, sure I could use the money, but then I gotta pay it back.
Thanks for the help - I’ll go into the financial aid office myself tomorrow. School doesn’t officially start until Monday, so I have a little time yet.
Thanks, congodwarf!
Yes. When I was in community college they only awarded you what you actually needed to pay for tuition, books, and health insurance. I applied for additional funds to help pay for heating oil and firewood. I also needed a new computer after the one I had finally died. The financial aid department was fully aware of what I was going to use the funds for. In fact, it was the financial aid supervisor who told me it was even possible. Paying to heat my house in the winter is considered a living expense and the computer was a school expense so it was approved and made the winter a hell of a lot easier for me.
However, there is a max you’re allowed to borrow and you can use up to that amount for school or living related expenses. Anything over that and you have to look to outside lending sources such as banks and credit unions.
At UConn they automatically award you the max you’re eligible for so you don’t have to fill out annoying forms asking for more. If you don’t want it all you have the option of refusing all or some (at least for a little while).
Money is fungible. A dollar is a dollar, no matter where it comes from.
Who’s to say that you didn’t already have 3k, and instead of using that 3k for food and rent. you used the loan disbursement instead. (Note: in reality there is zero difference here.)
@Anaamika
If this is a subsidized loan and you’re not paying interest on the money while you’re in school i’d suggest you actually invest the money somewhere. Something safe like a CD or U.S bond or something if you don’t want to risk it. You won’t make very much money, but it’s good to have assets/buffer money just in case. It’s good money management (and a learning experience, that’s why you’re in college right?).
Is it 100% kosher? Probably not. But in the end, it works out better for you if you keep the money even if it just sits in your bank account (if it’s a subsidized loan).
That’s all I was wondering. If someone had reason to suspect that a student was misappropriating their loan disbursement, there *could *be a problem. As I said in my first post, I realize that being found out is unlikely.
But, no matter how slim the chances, I don’t think it’s good advice AT ALL to invest this money. If not for legal reasons, than for moral ones. Student loan money isn’t unlimited. Every person who keeps more than they need for their education is making it harder for people to borrow in the future. When a bunch of people regularly take more money than they need, interest rates increase higher and faster than they would have otherwise because demand for the money is higher. People who might have qualified for a small amount of loan money may not qualify for any of it now. etc
Not that I think Anaamika was planning to do this anyway. But I think it’s good general advice wrt student loans, so I’m hitting the submit button.