How Long Does It Take To Get A Student Loan?

Wondering how long it takes to get student loan? Read more to know about the application process, disbursement period depending on the type of loan.

Updated by Akshata Patil on 31st October 2019

Once you have applied for a student loan and have received your approval. The next thing on your mind is when you will receive the funds. The disbursement of your funds depends on the type of loan you are applying and with whom you are applying.

The major loan lenders in the U.S are the Federal government and the private financial institutions. The process of disbursement varies for both the lenders and so does the time to get the funds. Federal student loans are got from the federal government while private student loans are got from private institutions.

Getting a student loan is a three-step process. The first process is the application process, the second process is getting approved and the final process is the disbursement of the loan. This process differs from lender to lender and depending on the type of the loan (federal and private loans).

Depending on the lenders, let us go through how long it takes to get a student loan.

Table of Contents

The Time Period for Receiving Federal Student loans

The process begins right from applying to the student loans until the disbursement of the funds.

The First Process- Application: Online or Paperwork

Time duration- 1 hour for online and 2 hours by Paper

Federal student loans begin by filing the FAFSA (Free Application for Federal Student Aid). As per the frequently asked questions on the FAFSA web site reports, online FAFSA takes up to 1 hour and by paper, it takes up to 3 hours. 

The Second Process- Approval: Email or Physical Address

Time duration- 3 days to 2 weeks

To know the status of your approval it takes around 3 to 5 days if you have provided an email. It takes around 7 to 10 days if you provide your physical address.

Basically it takes 3 days to 2 weeks for the FAFSA to be approved.

The Pre-Final Process-  Financial Aid Award letter by late March or early April

Time - received by late March or early April

On receiving your FAFSA details, the financial aid office determines your eligibility. If eligible, it will prepare a financial aid award letter. The financial aid award letter is called a financial aid notification for the first-timers and first-year students. This letter is received by late March or early April. 

The financial aid award letter includes information regarding need-based federal student loans and non-need based student loans. These loans include the Parent PLUS Loan, Direct Subsidized Loan, and the Direct Unsubsidized Loan. Some colleges do not include non-need based federal student loans such as the Direct Unsubsidized Loan and the Parent PLUS Loan. The Financial aid office manages and controls all the federal student loans irrespective of your financial need demonstrated or not.

The Final Process- Signing the MPN and Fund Disbursement

Time- The fund disbursement depends on when you sign the MPN

After receiving the Financial Aid award letter, you will have to sign a  Master Promissory Note (MPN). On signing the MPN, the college will disburse the federal student loans within 10 days before the first day of classes

After you have signed the MPN, the federal student loan will be disbursed by the college. The college has to disburse the funds within 10 days before college begins. But for the first-timers, first-year borrowers loans may be disbursed 30 days late. In some colleges, until 30 days after the first day of the payment period, these loans are not disbursed. After you have applied for institutional charges, such as tuition, fees, and campus-controlled room and board, the balance amount, if any, will be refunded within 14 days to you.

It might take several weeks for the process to complete. Hence, the sooner you sign the MPN the sooner you will receive the federal student loan funds.


The Time Period for Receiving Private Student loans

Unlike federal loans, private banks do not have a set of pre-standards. Every lender has a different application requirement and process, interest rates and term of the loan, and payment process.

Each private lender has his own terms and conditions. Before you sign your contract you must go through its terms and conditions and other related details. But, the general loan disbursement time period for private loans is 3 to 10 weeks.

The First Process- Determining Eligibility and Application

Time duration- Few minutes

For private loans, you can apply online by filling the respective banks' application forms. But first, you have to go through their eligibility check. Private banks let you know your eligibility within few minutes through their online eligibility check. This means that the ineligible borrower doesn't have to go further with the application process. But, the ones who are eligible for the loan may have to go further with the loan application process which may take more time.

To know your eligibility and to fill the application form online it takes only a few minutes depending on the bank's requirement details.

There are two types of private student loans depending on to whom the loan is disbursed. One is school certified and the other is direct to consumer. School certified loans are the ones that require your college to confirm and approve your loan. In other words, the loan is disbursed through your college. Direct to consumer loans are the ones that are paid directly to you, there are no schools involved. Most of private students loans are school certified as direct to consumer has a high fraud rate.

The Final Process- Disbursing the Funds to You or to Your College

Time duration: 3 weeks – 10 months to complete the entire process

After approval of the loan, the lender might take 2 weeks to 2 months to disburse the loan amount to the college or directly to you. In the event by which the money is sent to the college, it would take around 1 to 2 weeks for the balance amount to get refunded to you.

Generally, from the date of loan approval, it takes 3 to 10 weeks to receive private student loan funds. 


When to Apply for Student Loans?

Know that the funds are not available to you whenever you need them. If you want to get funded by the Federal Government you have to apply before your school starts. And for Private fundings, there is no such mandatory time constrain to apply for private student loans.

Federal Student Loans

The FAFSA is available on 1st October every year. You must fill these forms as soon as possible. As some federal funds might run out when you need them the most. In case, you don't receive federal aid as per your requirement even after applying early, you still have enough time to apply for federal student loans.

Hence, for filing FAFSA, sooner the better.

Private Student Loans

If you haven’t received enough funds from the government, you can opt for private loans for more funds. Unlike federal loans, private loans need not be applied in a specific time. They can be applied even in the middle of your semester. A borrower can apply for private student loans at any time of the year.