Getting student loans can be a lengthy and sometimes confusing process that varies depending on whether you’re taking out federal or private loans.
It can take a few weeks to a few months to get a student loan, so it’s important to plan ahead to ensure you’ll have funds when your tuition and other costs come due.
Here’s a rundown of the timeline when taking out federal or private student loans.
How long does it take to get a federal student loan?
Taking out a federal student loan follows a pretty standard timeline.
First, you’ll need to fill out the Free Application for Federal Student Aid (FAFSA). You can find this form — which needs to be completed every year — at studentaid.gov. The results of your FAFSA will determine how much (if any) need-based aid you qualify for, including federal grants, work-study programs and federal loans.
Each state has its own FAFSA deadlines so be sure to look into your state’s requirements long before you’ll need the money. Once you complete and submit your application, it will take approximately three to five days to process.
Once your packet has been processed, a Student Aid Report (SAR) is sent to the schools you listed on the FAFSA application. You’ll generally receive a financial award letter from those schools within three weeks of sending in your FAFSA. However, each school has its own time frame for accessing FAFSA information.
This financial award letter will outline the need-based aid you qualify for, as well as any other aid or programs the school plans to offer to assist with your tuition and expenses.
Once you’ve seen the federal financial aid available to you, you’ll need to accept the grants and/or federal loans offered. Before loan funds can be disbursed, you — and your cosigner(s), if applicable — will need to sign a Master Promissory Note.
This promissory note is a legal contract. Signing it demonstrates your promise to repay those student loan funds (plus any interest and fees) to the U.S. Department of Education, according to the original loan agreement.
Once the loan has been accepted and the promissory note signed, all that’s left to do is wait for the funds to arrive. Generally, the earliest federal student loans are disbursed is 10 days before the first day of the semester for which the funds are intended.
It’s important to note that first-time borrowers who are first-year students may see a longer delay. In this case, you may have to wait for funds until 30 days after your classes begin…Read more>>