Typically your college hands over a check for any leftover funds from your student loan or federal aid or grants once all the educational expenses from the college or university has been met. Now the funds handed over to the student with the following expectations. Since the refund is from your government or private student loan, the expectation is that you will use the remainder of the loan i.e your refund money on things that support your education. These could be school supplies, boarding and even commute. Yes, this does mean that you can put your refund money to purchase a car to help in your commute to school.
It is important that you maintain strict records on how you spent your loan refund money. This will come in handy if and when you have to show for whatever reason where the balance of your student loan funds went. What this means is that you cannot use your left over funds for entertainment and other non educational reasons. Spend your left over bonanza wisely.
This is a very common question and below are some of the related queries we get on this subject. As always any personal information is removed.
- “How can I spend my refund loan amount?”
- “I might be getting back close to $2000, I would love to use that money to pay my rent and other bills that have piled up. Is this allowed?”
- “What should I spend my loan refund money on? I already have all my books & other school supplies. I would like to buy a used car for transportation to & from school. Can I do this? I don’t think I have to explain to the Financial Aid office how I spent the money. What else should I do with any leftover money?”
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