A student loan is a money borrowed to solve educational expenses ranging from tuition fees, on-campus housing, textbooks, and project materials, to printing fees. A student will apply for a student loan from private organizations like banks and other valid agencies or the government ( federal government or state government). The fund is deposited directly into the school’s bursary account. Let us discuss, Why Did I Get My Student Loan Money Back?
A student loan refund is due to a student borrowing a loan to pay for educational expenses that are not billed directly from the student account for example textbooks, laptops, off-campus housing, etc. In situations where by student loan is high and all bills have been paid according to the school’s demand, and there are leftovers i.e the fund disbursed is more than needed the school gives the rest of the fund to the students via check or pays it directly into the student’s account.
This kind of money is not for frivolous activities or cravings like clothing, spring break trips, restaurant meals or takeout, or watching movies, this is because it’s a part of the huge loan you applied for, and will be paid back with interest. In situations like this, the money is to used on other educational expenses like a laptop for technology, textbooks, transportation, Off-campus housing, groceries when your meal plans are not covered, and so on. For some colleges refund is given to the students between 10 days to the start of classes and 30 days after classes have started, others could be five working days, seven working days, or 14 working days depending on your college. A student refund is not what it means, it is still a student’s loan, not a bonus that students should be happy about.
Student loan forgiveness
The Public Service Loan Forgiveness program is a United States government program to provide indebted professionals a way out of their federal student loan debt burden by working full-time in public service. This is also one of the reasons why students get a refund. A Portion of your debt or loan is canceled. For example, when you log in to your federal student aid site with your ID you will see a zero balance. The benefits of forgiveness are; getting a refund of part of your loan, you regain eligibility for federal student aid, and the negative mark on your credit card will disappear. Forgiveness is one of the reasons why some students are happy about a refund. Paying off a loan will not show on your credit scores. But it gives you a good overall financial picture because it will reduce your debt-to-income ratio. That may help you qualify for another loan on a home or auto purchase.
Ways to forgiveness of students loan
- Students can qualify for full cancellation or discharge of their loan.
- Students can also qualify for part discharge or cancellation of their loan ( in this case he or they will continue the installment payment of the loan).
Qualification for forgiveness
- An undergraduate student whose loan exceeds 20 years of payment
- A graduate student whose loan exceeds 25 years of payment
Waiting for forgiveness or getting a loan not payable within 20 years of your life is not painting a good picture, for instance, if you want to build a house you will estimate what it will cost you to complete the project to avoid uncompleted project, as the student should have the same mindset towards student loan decision making. Life is a journey while getting secondary education or professional study is a stage in life’s journey, every student should be encouraged to make good use of this stage by taking calculated risks and decisions.
What to do with a student refund
When you get more money than you need from a student loan, understand how a student loan works, and if possible ask questions in the right places, colleges have financial aid officers who can guide you properly on what to do and what not to do. In the case of a federal student loan, you are allowed 120 days to return the money if not needed. Contact the service provider and ask for the steps to follow to return the excess fund, this reduces your overall debt, and you won’t be paying interest on the returned part. These are other options to source for fund instead of accumulated debt, you need discipline and self-control to be able to save funds while doing the options below:
- Get a part-time job.
- Working during semester break and vacation.
- Apply for scholarships using the free scholarship search.
- Work hard to maintain the scholarship.
Conclusion
Getting your student loan money back is a refund that you will be paying back sooner or later. The decision to take a student loan can not be excluded from a student’s life if the student is not on a scholarship, the government that made this provision knows quite well that it is important and necessary for secondary education. Therefore, if you have a refund and you know there are other options available for you to settle your other expenses, return the refund and have a reduced debt to income ratio in the nearest future.
Frequently asked questions
What should a student do if he or she doesn’t get a refund?
Every college or university has student financial services where they can get detailed information about refunds, processing, counseling on student loans, and any financially related issues. The financial aid or bursar’s office is the right place to go, and through a guided assistant, the case will be resolved.
What d do I need to qualify for student loan forgiveness?
A student is eligible for student loan forgiveness when they have an unpaid loan after 20 years (if the loan was taken for undergraduate study), and after 25years ( if the loan is taken for graduate or professional study)
What is the debt-to-income ratio?
Debt to income ratio is the percentage of someone’s monthly gross income that goes to the payment of a debt, this is done by the mortgage industry.
