How Long Does It Take for You to Receive Your Student Loan Money?


Any discussion regarding college student loans usually refers to federal and private loans. When talking about how long it takes to get the money for a loan, it is best to talk about how long it takes for the entire process to be completed from application to distribution of funds. The process for a student loan can vary depending on what type of loan it is and the lender itself.

The Process For A Federal Loan

The process for a federal student loan always start by filling out a Free Application for Federal Student Aid (FAFSA). This application is for a loan that must be paid back, so do not let the word “aid” confuse you. It can take up to three weeks for this application to be processed and passed onto the financial aid office to determine your eligibility for funds.

If you are approved, you will be asked to sign a promissory note that keeps your loan active for 10 years after graduation. Once the note is signed, the funds could be distributed as late 10 days before classes begin. There could also be other delays by the school that would cause your funds to be held up. It could take several weeks for you to finally receive the funds from an approved federal student loan.

The Process For A Private Loan

Private student loans are broken down into two categories; direct-to-consumer and school certified. A direct-to-consumer loan has all of the funds of the loan transferred to the student’s account after approval. With a school certified loan, the amount of money required by the school is transferred directly to the school first, and then remaining balance is sent to student.

In both instances, students can apply online to get an idea as to whether or not the are approved. Denials are instantaneous and the process ends. An approval does not mean an immediate approval. When a student gets an approval notice after an online application, that starts a two-week process of reviewing the student’s application and the lender making a final decision.

With a direct-to-consumer loan, the funds can be transferred as quickly as eight weeks after the initial application date. Once the funds are transferred in a direct-to-consumer loan, the transaction has ended. For school certified loans, the money sent to the school is usually sent within eight weeks of the initial application date, with the remaining balance being sent to the student within two weeks of the school receiving its funds.

Federal student loan programs are designed to help more people get the funds they need for college, but the process can take months. Private loans are more difficult to get, but they generally have lower interest rates. Private loans can have their funds fully distributed within two months of the application date.