30 day wait to get refund for 1st time borrowers question

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30 day wait to get refund for 1st time borrowers question

Postby 2tkings » Fri Aug 13, 2010 7:21 am

In the past, it was my understanding that first time borrowers of federal sub & unsub loans had to wait 30 days for the credit balance to be refunded to them from their school. Is this the same with the new Federal Direct Lending program?

I changed schools. I've had Federal loans (sub & unsub) for 3 years now - always going through Sallie Mae to get them. When I asked the FA office at my new school if I would be considered a 1st time borrower, I was told yes because I switched lenders from Sallie Mae to Direct Lending. Therefore I would have to wait the 30 days before getting my refund.

It is my understanding that Sallie Mae can no longer offer federal loans & that all federal loans must go through Direct Lending. If this is true, then won't every student with federal loans have technically "switched" lenders? Does that mean every student with federal loans will have to wait that 30 day period for their refund this semester?

I guess I'm confused as to if the 30 day wait is a federal regulation or a school rule. I always thought it was mandated by federal regulations. When I read my MPN (yeah, I actually read it :) it states that the school has 14 days to refund any credit balance created by my loans.

I'm totally confused. I have some school supplies that HAVE to be purchased before class & I'm trying to figure out how to budget for them. Not knowing when my loan $$$ will arrive is making this difficult.

Ideas? Thoughts? Suggestions?
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Re: 30 day wait to get refund for 1st time borrowers question

Postby ejacobs » Tue Aug 17, 2010 7:21 am

Whatever it says on your Direct Loans MPN is the rule.

The only thing I can think of that may push the date back is tuition responsibility. When I was in school (graduated in 2009) we had what was called "Tuition Responsibility" dates that gradually ticked up from 25% to 100%. Essentially, they told you what money you had to pay back if you dropped your classes -- 25% means you have to pay back 25% of your tuition for the semester, etc.

Most schools wait until the 100% responsibility date to send out refunds because it ensures that you are fully committed to your semester course selections.
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