When you’re planning to enroll in college, learning how student loans work is a great first step. Part of this involves knowing how long it takes to get a student loan so you can be ready to pay tuition when the time comes.
The length of time it takes to process and disburse student loans can vary, but planning ahead will help you to prepare. Generally, you can expect the whole process to take between a few weeks and a few months, depending on your circumstances.
How Student Loan Disbursement Works
Student loan disbursement happens when your lender sends funds to your school to cover your expenses. Funds are sent directly in scheduled disbursements, usually at the start of the semester, trimester, or quarter. Your school then applies the loan to your account to pay for tuition and fees, room and board (if applicable), and other institutional charges (if applicable).
Once the school applies the loan to those charges, any leftover money will be issued to you as a student loan refund to cover any remaining educational expenses, such as books and school supplies.
Does Student Loan Disbursement Time Vary by Loan Type?
The time frame for student loan disbursement varies by loan type. Additionally, the process for applying for federal and private student loans differs. Understanding these differences could offer insight into how quickly you can get a student loan disbursement.
How Long Does It Take to Get Federal Student Loans?
The first step in applying for federal student loans is completing the Free Application for Federal Student Aid (FAFSA). This is how you’ll find out about any federal merit-based scholarships or grants for which you may be eligible.
Normally, the FAFSA is available on October 1st, and you should expect your FAFSA to be processed about five days after you submit it. Once you’ve submitted the FAFSA, you should expect to receive a financial aid package that is customized to your needs in about three weeks. If the details look good, you’ll sign a Master Promissory note to make things official.
That’s usually how the process works, but the Department of Education made significant changes to the 2024-2025 FAFSA form. Instead of being available in October, the FAFSA wasn’t available until January due to the changes. These changes resulted in serious delays, which caused problems with college acceptance timelines and made it impossible to calculate financial aid packages in a timely manner. Many college students didn’t find out what federal aid they were eligible for until late spring or even summer 2024.
Apart from recent FAFSA delays, the thing not all borrowers realize is that most student loans aren’t disbursed immediately after they’re approved. Normally, federal student loans are disbursed a few days before the start of the semester. If you’re nearing the beginning of the semester and are concerned that your loans haven’t been disbursed, contact your lender for more information.
If you are a first-time student loan borrower, you may also need to take these steps before any money can be disbursed:
- You may have to wait 30 days after the first day of your enrollment period if you’re a first-year undergraduate student and a first-time borrower. Contact your school’s financial aid office to find out if this rule applies.
- You must complete entrance counseling if you’re a first-time borrower of a Direct Subsidized Loan or a Direct Unsubsidized Loan.
- You must complete entrance counseling if you are a graduate or professional student taking out a Direct PLUS Loan for the first time.
How Long Does It Take to Get Private Student Loans?
One of the differences between applying for private vs. federal student loans is that you won’t need to rely on the FAFSA for private loans. Instead, you’ll apply directly with your lender of choice. Many lenders, including ELFI, even let you prequalify to see what type of interest rate you could be eligible for.
One benefit of prequalifying for student loans is that it normally doesn’t impact your credit score. Lenders typically use soft credit checks for prequalification, and these checks don’t affect your credit. If you decide to move forward with the loan, they may require a hard credit check, which will harm your credit by a few points. Prequalifying for a student loan can help minimize the number of hard credit checks you’ll need.
Private lenders don’t have one set timetable for loan disbursement, so how quickly you can get a private student loan depends on several factors. Often, it takes about three weeks for the funds to be disbursed after you’re approved. But sometimes the process can take much longer. In slower cases, lenders might take two or three months to disburse private loans, so ensure you take this into account when you apply.
How Long Do “School-Certified” or “Direct-to-Consumer” Loans Take?
Private loans are either “school-certified” or “direct-to-consumer.” Both types have similar disbursement timelines, which often last between a few weeks and two months.
School-certified loans are private loans that undergo a verification process with the chosen college before disbursement. When you’re approved for this type of loan, your school confirms things like your enrollment status and the estimated cost of attendance. Direct-to-Consumer loans are also private loans but are not verified by the school.
How to Check if Your Student Loans Were Approved
Federal Student Loans
Checking on the status of federal student loans is simple. You can view updates by logging into your FAFSA account. If you’ve already been approved for federal student loans, you can contact your lender for more information.
Private Student Loans
The easiest way to check the status of private student loans is to ask your lender. They can provide you with the most up-to-date information regarding your approval and disbursement timelines.
How Long Does It Take to Get a Student Loan Refund?
When your lender disburses your loans to the school, they’ll take out what you owe for tuition and fees. After that, if you have money left over for things like textbooks, they’ll send it back to you in the form of a student loan refund.
This type of refund can take about two weeks to process. Keep this in mind when you’re planning your application timeline so that you have the funds you need to cover other educational costs.
Common Issues That Can Delay Student Loan Disbursement
If you are wondering why your student loans are taking so long to disburse, you should consider if you made any mistakes when applying for your loans. Common issues that can delay student loan disbursement include:
- Applying for additional funding, like private student loans
- Submitting the FAFSA at the last minute or with errors
- Failing to or incorrectly completing the loan agreement
- Failing to complete the required counseling on certain federal loans
- Not meeting the minimum number of required credit hours for your loan
As mentioned, there were also some serious delays with the 2024-2025 FAFSA due to changes made by the Department of Education. These delays impacted timelines for college admissions and financial aid information and disbursement.
Considerations When Taking Out Student Loans
Plan ahead carefully before applying for student loans. Here are a few things to keep in mind:
- You can prequalify with several lenders to find out the interest rates for which you may be eligible.
- Understand what expenses your student loans can cover. Some student loans include limitations on how they can be spent.
- Keep in mind that your loans will accrue interest. Crunch the numbers ahead of time so you aren’t borrowing more than you need.
Questions? The team at ELFI are ready to help! Learn more about our private loan options and click “Check Your Rate” to be connected with a personal Student Loan Advisor.
