How to Cancel Student Loans That Haven't Been Disbursed


College students have the right to cancel all or part of a federal student loan prior to or after the money has been disbursed to the university. However, if you have a private student loan with a bank once the agreement is signed, most banks consider it your obligation to repay. Review the terms of your contract for cancellation deadline. The lender usually disburses the loan to the college at the beginning of the fall and spring semester. First, the loan will be applied for the payment of tuition, room and board and fees. If there is money left over the college will add a credit to your account or pay you directly with a check or deposit the funds in your bank account.

Things You'll Need

  • Your assigned school email address
  • Copy of loan application or promissory note
  • Student ID number
  • Verify whether or not you have received written notification from your college of when the loan money will be credited to your account. The college will also send notification to students with a private student loan. This usually can be done by checking online at the email address that was given to you by the college (ex. or by logging onto your college's financial aid office website.

  • Compose a letter to your college financial aid office informing them that you are canceling the full amount or a portion of the loan. Be sure to include your full name, student ID number and the type of loan (for example, direct loan or Stafford loan) and the amount of the loan. Call your bank or lender for cancellation procedures and review your contract if you have a private student loan.

  • Submit a written request to cancel the loan to your financial aid office. The request to cancel the loan must be made within 14 days of the date your school sends you notice that the loan will be applied to your account or by the first day of the payment.

  • Contact the college's student accounts office and confirm that all or a portion of the loan was returned to the lender. Check the account balance.

  • Verify with lender. You can contact the U.S. Department of Education's Direct Loan department through their website, or call 800-848-0979. Review your application and promissory note. The lender contact information should be listed on your application. Call them with additional questions.

Tips & Warnings

  • Keep a copy of your written request and make note of date that it was submitted to the financial aid office. If possible, have the clerk time stamp it and request a receipt.


  • Photo Credit Roll of dollars in nest image by Mykola Velychko from
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