Disbursement Date

"Disbursement Date" submitted by SchoolGrantsfor Editorial Team and last updated on Thursday 26th May 2011

Table of Contents

Provide the approximate month and year you received the loan funds. If you leave this field blank, we will use the month and year you will enroll in college. Once your lender receives school certification, your loan will be processed and you will be notified of your funds disbursement date.

Borrowers in the unsubsidized program must begin to repay interest on the loans within 30 days of disbursement, although many borrowers defer these payments. Interest is charged from the day the loan is disbursed and repayment begins within 60 days of disbursement. As with student loans, parents have the option to select standard, extended, or graduated repayment options.

In case of Federal PLUS Loans for Parents repayment begins within 60 days of the loan’s last disbursement. You can defer payments until your child ceases to be enrolled at least half time and during the six-month, post-enrollment period. Interest accrues during deferment. In case of Federal PLUS Loans for Graduate and Professional Students (Grad PLUS) repayment begins within 60 days of the loan’s last disbursement. You can defer repayment while you’re in school at least half time, and during the six-month, post-enrollment period. Interest accrues during deferment. If you do not complete your teaching service obligation, the amounts of the TEACH Grants you received will be converted to a Direct Unsubsidized Loan that you must repay with interest charged from the date of each TEACH Grant disbursement. The interest rate on subsidized Stafford Loans made to undergraduate students, with a first disbursement date on or after July 1, 2008, will be reduced in future years, as shown in the following chart below:

Interest Rate Reductions for Subsidized Stafford Loans Made to Undergraduates

First disbursement of a loan: Interest rate on the unpaid
balance
Made on or after And made before
July 1, 2010 July 1, 2011 4.5%
July 1, 2011 July 1, 2012 3.4%

Note: These interest rate reductions do not affect the interest rates of any prior Subsidized Stafford Loans made to undergraduate borrowers; the interest rates on those prior loans remain unchanged. The reduced interest rates apply only to subsidized Stafford Loans made to undergraduate students. Subsidized Loans made to graduate students and unsubsidized Stafford Loans made to all students (undergraduate or graduate) have a fixed interest rate of 6.8%.

If you take out a federal loan, you should complete loan entrance counseling before you receive your first loan disbursement and exit counseling before you leave school.

Disbursement Fees

A fee charged by the lender when the loan is disbursed, or paid, to the borrower.

Origination Fee

A fee paid by the borrower and deducted from the principal of a loan, before disbursement to the borrower. For federally backed loans, the origination fee is paid to the government to offset the cost of the interest subsidy to borrowers. For private loan programs, the origination fee is generally paid to the originator to cover the cost of administering and insuring the program.