How to Cash a Student Loan

When you cannot pay your educational costs, even with grants or scholarships you have received, student loans can make up the difference. The manner in which you receive your student loan check depends on your lender and your school's policies on student loans. In general, loans from the federal or state government, such as the Stafford, Perkins or PLUS loan, go through the school, whereas private student loans can go directly to you.

Instructions

Government Student Loans

1. Add up all of the financial aid you will receive this semester, including your student loans. Subtract the costs for which your school bills you, which can include tuition, fees, room and board. If you are left with a positive number, you will get a student loan refund check. Otherwise, your whole loan will go toward paying your bill at the school.

2. Call or visit the financial aid office at your school and ask when and how it issues student loan checks. This date could be anywhere from a few days before classes begin to a month into the semester. If you need money before then, ask about getting an advance payment to help you buy books and other costs at the beginning of the semester.

3. Pick up the student loan check from the office on the appropriate date, or watch your mailbox for the check to arrive, depending on your school's policies.

4. Take the check to a bank at which you hold an account. Deposit the check into your account or cash it. Depending on your bank's policies and the amount of the check, you might need to wait a few days for funds to clear before you can withdraw any in cash.

Private Student Loans

1. Ask your private lender how it disburses student loan funds. Some lenders send the check to the school, in which case you will need to follow the process above for government student loans. Other lenders mail the check directly to you.

2. Watch the mail for your student loan check to arrive from your lender.

3. Follow the process in Step 4 of the government student loans section to deposit or cash the check at your bank.

4. Use the student loan funds to pay your bill at the school, if needed, before spending the money on other educational expenses, including rent, groceries, books, supplies, transportation and daycare expenses for your dependents.

References

• Thomas M. Cooley Law School: How to Receive Your Student Loan Proceeds
• BMCC: Financial Aid -- When Do I Receive the Money?
• Federal Student Aid: Direct Stafford Loans
• Sallie Mae: Frequently Asked Questions About Student Loan Certification