Some college students have been left waiting weeks for federal loan money they expected to use for rent, transportation and other living expenses as schools struggle to implement sweeping new federal student-loan rules. The delays affected students during the summer and are fueling concerns about whether similar problems could affect students expecting financial aid this fall.
The problems follow major changes to the federal student-loan system that took effect July 1. Colleges have had to adjust their financial-aid systems and procedures to accommodate new borrowing limits and eligibility requirements while also working through changes to the federal systems used to process student loans.
For students who depend on loan proceeds for more than tuition, a delay can quickly create financial problems. Federal student loans may also help cover eligible education-related living costs, including housing, food and transportation, leaving students who experience delayed disbursements to find other ways to cover those expenses while they wait.
Federal rules generally require schools to disburse federal student-aid funds promptly once the requirements for payment have been met. When federal aid credited to a student’s account creates an eligible credit balance after school charges are paid, schools generally have 14 days to provide that balance to the student or parent. But the transition to the new loan rules has complicated processing at some institutions.
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For students who rely on financial aid to cover everyday expenses while attending college, receiving the money on time can be nearly as important as receiving it at all. With the fall semester underway at colleges across the country, students expecting federal loan funds should keep an eye on their financial-aid accounts and contact their school’s financial-aid office if expected money does not arrive.
