You completed the Free Application for Federal Student Aid (FAFSA) and submitted all the needed paperwork.
Now you are enrolled in school and your friends are talking about getting a refund check. An email sent from your college says the funds will be available soon. Spring break is coming up and some of your friends are talking about going to the beach. Then you get another email from the campus housing office. They are asking you to save a few hundred dollars for the housing deposit for the upcoming fall semester.
Now you are curious. Is a refund going to be in your bank account? You may be wondering: “Is this extra money for me to spend?”
Let’s review how this works.
Your School Bill
You usually have a bill for tuition and fees, room and board (if you are staying on campus), and books and supplies. If your financial aid award is greater than these expenses (or others, like a library fine or parking ticket), you may receive the extra funds in what’s commonly called a “refund check.”
Is It Really a Refund Check?
It depends. If you have a student loan as part of your financial aid for the semester, the “refund” can include loan money, which you will have to pay back. Look at the specific financial aid you have received to double-check whether you have loans.
Weigh Your Options
Before you spend your refund, ask yourself the following:
- Should I consider saving some of the money for the housing deposit for the upcoming school year and other college expenses for next year?
- Can some of the refund be used to pay off my student loans early so I owe less after graduation?
- And, if your refund includes loan money, do I want to spend the extra money now and pay it back with interest later?
Oftentimes, “refund” checks aren’t really refunds, but they don’t need to result in further debt. In many cases loan funds can be returned or used to support your education! If you realize you don’t need the money, or have questions about how it should be spent, contact your institution’s financial aid office.
Kenneth McGhee is the director of the DC Tuition Assistance Grant Program (DCTAG) within the Office of the State Superintendent of Education (OSSE) in Washington, DC. OSSE is a NACAC member organization.