How Fast To Pay Off Student Loans

Last Updated on August 25, 2023

It’s time to get your student loans. You’ve been waiting for this moment since you were old enough to understand what college was. Now that you’re finally enrolled and ready to start classes, it’s time to apply for financial aid—and hopefully get it!

But how long does it take? How long will you have to wait before those funds come through? The answer is… a little bit longer than you might think.

The good news is that federal student loans are processed incredibly quickly—usually within two weeks of your application being submitted. But state-funded loans take up to four weeks, and private loans can take up to six weeks.

If you need money right away, the best thing you can do is ask your school if they offer financial aid in installments or if they have any special programs designed specifically for students who are paying their own way through school without parental support.

How Fast To Pay Off Student Loans

How long does it take to get a federal student loan?

Federal student loans usually offer better terms and protections than private student loans, so you may want to find out what governmental aid is available to you first. 

You’ll need to complete the Free Application for Federal Student Aid, or FAFSA, to determine if you qualify for federal student loans. There is a yearly federal deadline for aid, and many states and colleges also have deadlines for the aid they administer. The FAFSA takes about an hour to complete and will require several documents detailing your financial situation. 

It will take roughly one to three weeks to process your FAFSA and receive a financial aid package designed around your needs. This package may include grants, scholarships, work-study programs, and loans. Even if you aren’t sure you qualify for financial aid, it’s still beneficial to fill out the form — you never know what may be available unless you apply.

If you choose to take out a loan, you’ll need to sign a Master Promissory Note, which is a legal document you sign to commit to repaying your loan along with interest and fees. You’ll also agree to the repayment term and lock in the amount of money you want to borrow. The government won’t disburse your loan until you sign this document. 

You can usually expect to receive federal funds around 10 days before classes start. If you are both a first-year student and a first-time borrower, you may experience a 30-day delay.

How long does it take to get a private student loan?

While it’s usually a better idea to take out federal student loans than private student loans, sometimes you’ll need a bit of extra cash to pay for college that isn’t available through the government.

The application process for private student loans is often much quicker than filling out the FAFSA. You can see your rates and find out whether you’re approved for a loan within a few minutes with some companies, and most lenders will give you an approval decision within 15 minutes. 

Generally, you can check the status of your loan disbursement through a lender’s online portal or by calling customer service. You’ll have to sign a document similar to the Master Promissory Note you’d sign with the government to agree to the lender’s repayment terms.

Once you accept the terms of your loan, your college will probably receive funds from a private lender within two to 10 weeks. You’ll receive the funds in your personal bank account if you take out a direct-to-consumer loan, while your school’s financial aid office will get the money if you take out a school-certified loan. 

Most money will be allocated without a hitch. But if you’re stressed out over the status of your funds, reach out to your lender to find out when it will disburse your money.

fafsa student loans

Many people are surprised to learn the FAFSA is about a lot more than federal student aid. In fact, the FAFSA is so important that financial aid officers say skipping the FAFSA is the most-costly mistake you can make when pursuing your education.

FAFSA determines your eligibility for:

Federal need-based grants, including the Pell Grant and Federal Supplemental Educational Opportunity Grants (FSEOG)
Subsidized federal student loans, which are based on need
Unsubsidized federal student loans, which most students qualify for regardless of need
Federal work-study
Some state-based financial aid, including grants, scholarships, and loans
School-based financial aid, including need-based grants and scholarships
School-based merit aid, since many schools require you file a FAFSA to consider you

Here’s a weird wrinkle with the FAFSA: You apply for aid through the U.S. Department of Education, but you’ll be notified of your financial aid awards through the schools you’ve applied to.

If your FAFSA qualifies you for federal grants, loans, or work-study programs, that money is disbursed directly to your school. With grants or loans, your school will apply that money toward your tuition, fees, and room and board (if you live on campus). Your school will notify you each time money is disbursed to cover expenses, typically twice a year. Any money left over will be paid to you to use for other expenses associated with school. You may be able to choose how you receive that money: via check, cash, a credit to your bank account, or a prepaid debit or ATM card.

If you qualify for a work-study program, your school will pay you directly unless you request that money be applied to your student account.

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