How Long Does the Student Loan Disbursement Process Take?

Updated: May 11, 2022

When you’re planning to enroll in college, it’s important to organize ahead of time, and learning how student loans work is a great first step. You may also want to consider 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 is when your lender sends the loan amount to your school to pay for your tuition, room and board, and other education-related expenses.

How are student loans disbursed? Student loans are sent directly to the school in scheduled disbursements, usually at the start of the semester, trimester, or quarter. Funds are applied 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 in the form of a student loan refund for you to cover any remaining educational expenses such as books and school supplies.

Does Student Loan Disbursement Time Vary by Loan Type?

How quickly you can get a student loan will vary by the type of student loan you’re seeking. Additionally, the process for applying for federal and private student loans differs. Understanding these differences could help you to better understand 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, once submitted, you should expect your FAFSA to be processed in about five days.

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.

One thing not all borrowers realize is that most student loans aren’t disbursed immediately when 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 borrower and haven’t taken out a student loan before, the following may apply 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. Instead, you’ll apply directly with your lender of choice. Many lenders, including ELFI, even allow you to prequalify to see what type of interest rate you could qualify for.

One benefit of prequalifying for student loans is that it normally doesn’t impact your credit score. Most lenders use soft credit checks for prequalification, then if you decide to move forward with the loan, they may require a hard credit check. Prequalifying for a student loan can help minimize the number of hard credit checks you’ll need.

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. In other cases, though, receiving your private student loans can take much longer. It’s not uncommon for the disbursement process to take two or three months in slower cases.

How Long Do “School-Certified” or “Direct-to-Consumer” Loans Take?

School-certified loans are private loans that undergo a verification process with the chosen college before disbursement. When you’re approved for the 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.

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.

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 to the form by logging into your FAFSA account. If you’ve already been approved to receive federal student loans, then 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.

These types of refunds 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

Considerations When Taking Out Student Loans

Take time to make a plan before applying for student loans. Here are a few things to keep in mind:

• You can prequalify with several lenders to find out the types of interest rates for which you may be eligible.
• Be sure you 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 taking out more than you need.

What Happens When I Have to Start Repaying My Student Loans?

Before applying for loans, it’s crucial to think about the best way to repay student loans. After graduation, most students have a six-month grace period. The goal is to give you time to get established before paying back your loans.

During this time, familiarize yourself with your student loan terms so you‘ll know what to expect. If you have federal loans, you may want to explore options like Income-Driven Repayment (IDR) plans or Public Service Loan Forgiveness (PSLF).

If your financial situation improves or interest rates have dropped, then student loan refinancing may also be a good idea. You could lower your student loan interest rate and even choose a repayment term that better fits your needs.

Try ELFI’s Student Loan Refinancing Calculator to see what you could save.*

Pre-Qualify for Private Student Loans Today With ELFI

ELFI offers private student loans for college with no hidden or origination fees and flexible repayment terms.** With ELFI, you could also prequalify without hurting your credit score.

Once you apply for a private student loan with ELFI, you’re assigned a Student Loan Advisor who will be available to answer any questions you may have.

How long does it take to get a student loan disbursement from ELFI? After we receive your application and your documentation, we send the loan application information to the school for certification. Your school will verify your enrollment status, academic progress, and your financial aid package to confirm the amount of the loan.

Once the school has certified the amount, you must complete your application by accepting your loan terms, and then we will send the funds directly to your school on your behalf. This process may take up to two weeks to complete.

**Education Loan Finance is a nationwide student loan provider offered by Tennessee based SouthEast Bank. ELFI is designed to assist students financially with receiving their education. Subject to credit approval. See Terms & Conditions. Interest rates current as of 06-01-2023. Variable interest rates may increase after closing but will never exceed 18.00%. Interest rates may also differ from the rates shown above. The term of your loan, financial history, and other factors, including your cosigner’s (if any) financial history can affect the interest rate. For example, a 10-year loan with a fixed rate of 7% would have 120 payments of $11.61 per $1,000 borrowed. Rates are subject to change.