A student’s journey through college comes with a lot of expenses. That’s why students can access refund checks to pay for some expenses. As a result, having a loan refund check becomes very important for many students as the semester begins. Here are some important factors you should know about regarding a student loan refund check.

What is a refund check from a college?

A refund from a college is the result of having more total funding on your account than the actual balance due. Funding on your account comes from a combination of sources including, financial aid, scholarships, student loans, cash payments, and other miscellaneous payments.

Student loan refunds are

intended to cover costs surrounding typical student expenses, like supplies, lab equipment, and technology. However, since refund checks originate from student loan funding, either federal or private student loans, it all needs to be paid back with interest.

Here are some tips to encourage more financial literacy that will go a long way toward helping you keep perspective on your expenses and future debt obligations:

  • Make smart technology purchases that provide value.
  • Gain some nice headphones. Plugging into a source for audio keeps a clear stream for an individual’s needs while not subjecting everyone else to the same sounds.
  • Buy a product on a student credit card and pay it back right away. An easy way to build credit before graduation is to simply funnel expenses through a credit card and pay off the balance entirely.
  • Return unused student loan money to the lender. Rather than spending student loan refund money if not needed, just send it back to the loan provider as a pre-payment.
  • It’s important to calculate your own student loan needs for yourself, so as to have a firm understanding of your requirements and budget plan.

How is a refund check processed?

Getting a student loan refund check follows specific steps:


The office of financial aid must award all of the student’s financial aid, including federal and private student loans. In addition, it is the financial aid department’s responsibility to make sure they meet the federal regulations for the cost of attendance. A normal cost of attendance for college includes the cost of tuition, room and board, transportation, books, and miscellaneous expenses. When added together, the cost of attendance is always greater than the actual charges on the tuition statement. The cost of attendance is the maximum amount of total funding in a student account. This prevents students from borrowing more than they need.


The student must complete all required paperwork for their financial aid to pay correctly. Some required documents include your award letter, any required loan promissory notes or financial aid verification documentation. If key documents are missing, the refund check will not be released to you.


For most students, there is a supplemental student loan that must be paid first before accessing the refund check. When regular financial aid is not enough to cover the entire bill, students turn to an alternative loan or a parent plus loan to cover it. There is a specific procedure followed to make this happen:

  • The student successfully applies for the additional loan by completing the application correctly.
  • After loan approval, the school acknowledges the additional loan by certification. During loan certification, the financial aid office confirms the correct loan amount and that the student indeed attends the school. The school is free to reduce the loan amount to fit within the cost of attendance. So, if a student applies for a $20,000 student loan, but can only fit $10,000 within the cost of attendance, then the loan is reduced.
  • The lender receives the certification and sends money to the school either electronically, or by paper check.
  • The school receives the loan funding and pays it to the student’s account along with other financial aid sources. All the student’s accounts showing an excess of funding are put to a review called a “mismatch.” This is done to ensure that each student is receiving the correct amount of refund money and has not exceeded the cost of attendance with their total funding.
  • A student receives a refund check either electronically or by paper check. If done electronically, the student needs to complete a registration with the school for electronic funds transfer (EFT) with their checking account.

Common refund check problems and resolutions:

All your paperwork is late:
If you waited until the last minute to file your FAFSA and/or apply for student loans, anticipate that your refund check will not be available until later in the semester. Talk to your financial aid office to find out the turnaround time. If they cannot give you a specific date, try to find a range, like sometime during the month of October. If you are late, the refund may take until November, or possibly until the end of the semester.

You submitted paperwork, but something was wrong:
Maybe you forgot to sign something or forgot to submit a very important form. You may think everything is complete, but it turns out you missed something. Make sure you review all documents and follow up with your financial aid office early in the semester to make sure things are in order.

Lesson learned:
If you are looking for a refund check, submit all required info early, and follow up often to make sure everything is in order.

Keep in mind, student loan refunds are not “free” money. Loan refunds are part of the student loan. They will be included in the total amount of debt accruing interest. When the time comes to repay their debt, students may wish they hadn’t accepted their loan refund check or had at least been a little wiser in terms of how they spent it.

Should I accept my student loan refund check?

What can you do if you don’t want to risk the potential negative effects that might result from accepting your student loan refund? You have the option to return your refund check.

If you aren’t in desperate need of money, sending back your refund may be your best choice. Returning your student loan refund check to the Department of Education means that you are lowering your overall loan debt. In summary, removing it from your financial aid package negates your responsibility to repay it post-graduation.

After weighing the positives and negatives, it may seem as though the soundest decision would be to return your student loan refund. However, if you are in need of money and won’t be able to afford to return the refund, it is advisable to accept your student loan refund with the intention of being extremely prudent in how you spend it.

Please note that the information provided on this website is provided on a general basis and may not apply to your own specific individual needs, goals, financial position, experience, etc. LendKey does not guarantee that the information provided on any third-party website that LendKey offers a hyperlink to is up-to-date and accurate at the time you access it, and LendKey does not guarantee that information provided on such external websites (and this website) is best-suited for your particular circumstances. Therefore, you may want to consult with an expert (financial adviser, school financial aid office, etc.) before making financial decisions that may be discussed on this website.