How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Wendy Reed Your Own Question

Wendy Reed
Wendy Reed, Enrolled Agent
Category: Tax
Satisfied Customers: 3345
Experience:  15+ years tax preparation and tax advice.
753989
Type Your Tax Question Here...
Wendy Reed is online now
A new question is answered every 9 seconds

What happens to my student loans when I withdraw from class

Customer Reply

Customer: replied 6 years ago.
My students loans have already disbursed to my accounts and I received a small refund. I have been sick this session and found myself falling behind. I don't want to receive a grade below B, I may need to withdraw. What happens to my financial aid since the loans have already been disbursed? Will the school send the lending institute back the money that has already been disbursed; leaving me a balance owed to the school?
Expert:  Wendy Reed replied 6 years ago.

Hello there,

I went through a similar situation with my child. What happens is that you will withdraw, and the institution will process your account. There is a formula that the institution uses to figure out how much if any you are due as a refund, and if so how much will be paid to you directly (if you paid any of the tuition and fees out of pocket in addition to the loans). The refund (if any) will be paid to the lender, and the lender will be notified that you have withdrawn. You will still owe any remaining balance to the lender. It would be beneficial if you spoke to the financial aid office at your school so that they can explain to you the process in detail. You may also want to call the lender to see when payments toward the loan need to begin if you do withdraw.

Customer: replied 6 years ago.
Reply to Wendy Rieger's Post: No; Your reply didn't answer my question. I know that I will owe the lender a remaining balance; however, will I owe the school? For example: Let's say I have a subsidize loan for $3000, which had disbursed for this term, and the cost of this 8-week session was $2500. The school sent me the balance, as a refund, of $500. This is an 8-week graduate course. During the 5th week, I drop out. What happens to the $500 that they disbursed to me and what happens to the other $2500 that was applied to the course? And, what happens to my financial aid for the next term?
Expert:  Wendy Reed replied 6 years ago.

I'm sorry. There is an institutional formula that the school will use to determine how much of your tuition will be refunded to you. This is based on your attendance. The school will generally keep whatever loan proceeds they have to cover your tuition balance, and then pay the lender if there is anything left. So no, you should not owe the school, but you should check with the school's billing office and request a final bill or final account statement to make sure that there are no errors.

Presumably, if there is no refund past the 1/2 way point of the term, and the school keeps the $2500 for tuition, and you have kept the $500, you will still owe the lender $3000.

You will need to speak to the lender and possibly the school financial aid office to determine whether or not you are still eligible for any predetermined aid next semester.

I am sorry that I can't be more specific, but this is generally the way that it works with universities and fin. aid lenders, but different schools have different policies regarding tuition and loans.

Please get the names of contacts at your school and the lender's office, and request statements in writing to protect yourself.

Wendy Reed, Enrolled Agent
Category: Tax
Satisfied Customers: 3345
Experience: 15+ years tax preparation and tax advice.
Wendy Reed and other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.