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    Federal Direct Stafford Loan Refund?

    Sorry if this is the wrong forum to be posting in but I just have a quick question. I'm a student at Penn State and I'm basically paying for my entire education in loans. A few months ago I got an email that said I received a refund of about $800, and that this money would be automatically placed into my bank account. I called our Bursar's office and they said it was a refund from a Federal Direct Stafford Loan. I'm a little confused though, can I spend the $800 that was put into my bank account? Why would I get a refund on a Federal loan? I would have asked more questions when I called but I think I was talking to a secretary who didn't know much...Thank you to anyone who can help!

    #2
    I think because when you fill out the loan paperwork they are guessing high because they want you to be able to buy books and any other school "need" then when it has been totaled what you did and didn't buy from the school store on credit is refunded to you.

    Yes you can spend this.

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      #3
      Exactly, when you apply for the stafford loan or whatever anything that is left after the tuition is paid is yours. always keep in mind it is a loan. I am assuming that you don't qualify for the pell grant? Also was advised today by a friend that the unemployment office has lots of extra money for school. not sure of fact of this just what I was told.

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        #4
        I do get the Pell Grant actually, $1600 a year. This school is horrible with student aid though, pretty much all the aid I got is from Pell or PHEAA...I should probably have chose a cheaper school :/

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          #5
          Watch it - that's my alma mater! LOL
          Yes, what you get back is the difference between what it costs and what you were given in aid, and it's all yours to spend, but you will have to pay it back.

          Read your Penn State bills carefully. After I graduated, I had an $800 loan to pay back directly to Penn State, and I didn't even know they had given it to me. I was getting crazy refunds of around $3000 and can't for the life of me figure out why PSU felt the need to give me that extra $800. But evidently they did, and then they wanted it back. I should have been more proactive.

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            #6
            Hahah well don't get me wrong it's a great school or else I wouldn't have chosen it! Just pretty expensive. And thanks for the info.
            Can I ask what your major was?

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              #7
              Originally posted by akm5231 View Post
              Hahah well don't get me wrong it's a great school or else I wouldn't have chosen it! Just pretty expensive. And thanks for the info.
              Can I ask what your major was?
              Human Development and Family Studies - you want fries with that?
              What's yours?

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                #8
                Stafford loans, based on my experience, we a fixed amount. Meaning whether you go to a school with tuition of 10k or 20k per semester (or per year), in my day, my stafford loan was ALWAYS the same amount- about $3600 per year I think- and then other loans covered my balance.

                Its possible that between all your grants and loans, you have tuition covered... then later the federal government "retroactively" changed (raised) the amount of stafford loans, so therefore more money comes in, and the school releases the money to you.

                I find it interesting the school had access to your bank account.

                Ask questions to the school as to what caused the $800 to get "created".

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                  #9
                  another penn state local here. i have to agree with the OP, while still a great school, the costs have really jumped over the past decade or so, especially for in-state costs. while the out of state costs were always somewhat high, the in-state costs have gone crazy. the price a family friend paid back in 1999 compared to the price now is a little eye-opening.

                  i also want to echo what others have said here, be pro-active and make sure you understand your bill and where all the money is both coming from and going to. as horrific as it sounds, spending some time at the shields building making sure everything is as it should be is worth the time.

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                    #10
                    Originally posted by Confetti View Post
                    Human Development and Family Studies - you want fries with that?
                    What's yours?
                    Graphic Design which basically=starving artist haha. They have a really great program though, only 15 people graduate from it every year. But it's supposedly REALLY hard/expensive so I'm thinking of changing to Advertising but ehh. None of my interests will do me any good as far as making money goes when I graduate haha.

                    jim_ohio, I think all PSU students are required to set up a bank account with PNC Bank at the start of their freshman year, probably for instances such as this.
                    And skylog, the price is insane. I also have a twin sister at school with me so it's pretty ridiculous. Unfortunately I wanted a well-known school that wasn't too far from home...
                    Last edited by akm5231; 01-21-2010, 09:08 PM.

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                      #11
                      I read an article about college costs, each time the federal government creates a tax break or college rebate, the cost of college will go up by the amount of the tax break or rebate.

                      For example, if the Hope credit increases $500, you can bet every college in the land will increase tuition by $500. Since the college receives the money, but is not the one giving it away, they can increase what they charge by the amount of the handout.

                      Harvard and Ivy league same thing- when their endowments can give out more money, they can raise tuition by the amount their endowments can give out and not see any change or backlash from increasing the costs.

                      If you want to see college costs get under control, you need to "regulate" the endowments these colleges run more.

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