What Can I Do With My Student Loan Or Financial Aid Refund Check?
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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It sounds as if you really need a car. That would be better and safer than a car or bus. Remember to save enough out to pay the insurance and gas.
You probably will save money by being able to go to cheaper places and buying your groceries in bulk (which is hard to do in a cab or bus) so I think a car would be a good investment.
And just think, if you want an ice cream cone in the middle of the night,, you can just hop in your car and go. LOL —I do that sometime.
You could save it for next semester and reduce the amount of student loans that you need.
You can do whatever you want with the money. It’s all yours!
I don’t see why you can’t use the money to buy the car. Your friend may not know what he/she is talking about. A car would be a good investment. With my first financial aid check I bought a decent used vehicle. I say go for it.
What happens when a student who have taken education loan and he died what bank will do.
They’d bill his family. Our government is ruthless that way.
Nope. You are not obligated to pay back student loans if you die or become disabled.
http://www2.ed.gov/offices/OSFAP/DCS/loan.cancellation.discharge.html
Do I have to pay taxes on this because it is “income”.