Don't get lured in by the $$$ on your student refund check. Get some more info before you cash that check!
What is a student refund aka refund check?
A refund is the amount of financial aid remaining after total costs (tuition, fees, books, etc.) are deducted from your financial aid award package for the semester. You receive a credit to your student account, usually in the form of a check or direct deposit, for the remaining value.
How do I know if I have one?
If you’ve been approved for financial aid you can view your award status on your school’s website or give the financial aid office a call.
Is it free money?
NO! In most cases a student refund is from a federal loan which has to be paid back with interest, so although the money is tempting now, it will cost you later. Grants are considered “free” or “gift aid” and are usually given on financial need basis. Some of the most well-known grants are Pell grants, Federal Supplemental Educational Opportunity grants, TEACH grants, and Iraq and Afghanistan Service grants these funds do not need to be paid back.
Who gets a student refund?
You can only receive a refund on money from the federal government. You will not receive a student refund for scholarship money, awards, and non-federal grants. Instead, those funds will be applied to your educational costs, and any money not used will be refunded to the scholarship fund. Remember, all loan money must be paid back whether you completed your degree or not. And all of your loans accrue interest, which means there is an additional fee that is tacked on until you pay the loan off.
How much money do I get?
It all depends; each case is different. You won’t receive a refund if your total cost is equal to, or greater than, your financial aid package. If you have a remaining balance or your financial aid covered the exact amount of your school cost then there will be no money left over. A refund is based on money that’s LEFT OVER after expenses.
If I drop a class can I get more money?
If you drop a class before the deadline to drop classes you usually won’t have to pay a fee, but the money you receive back is still a loan which will have to be paid back. Also, your class attendance, class participation, and withdrawing or dropping from classes can jeopardize your ability to qualify for financial aid.
Beware of your Loan Limit
The financial aid well does run dry eventually, so please be aware of your loan limit. Independent students, undergraduate and graduate students all have a different loan limit but just know that if you exceed this amount before graduation then you will be left to pay for the completion of your degree.
Don’t be in such a rush to spend the money. Remember, it can be used for courses next semester. If you don’t need it, don’t spend it, it will be deducted from the amount of your financial aid package and you will not be responsible for repaying it when you graduate.
I hope this helped! If you have any other tips or thoughts, please share them on my channels @YoungFreeMI.
Stay Young & Be Free,