Once a student accepts a student loan package, funds are usually applied directly to his or her student account balance and may be applied to tuition and fees or other costs, like room and board. Loan packages are typically broken up between the fall and spring semesters. Any overage is paid directly to the student by check or direct deposit into the student’s bank account for use toward qualified educational expenses.
The Student Loan Ranger often receives reader questions, and we took the opportunity to answer this one below.
Q: I was cleaning up in the garage and found two student loan refund checks in the realm of $7,000 dated 2009 and 2010, respectively, in a box full of old school-related paperwork. However, I reached out to my former school and they claim that the money was not sent back to the lending institution and my “account” with the school has a credit of $7,000. They are now sending that money to me next week.
My question is, are schools required to send back uncashed checks to the lender after a certain amount of time has passed? I’ve been paying interest on money that I never had in the first place. Is there anything I should be asking or doing? Or should I just take this money and immediately pay off a majority of my loans?
For the answer check out the rest of the post at the Student Loan Ranger blog!