The refund that isn’t a refund
Why? Well, that refund isn’t a refund at all. It’s a loan—and you’ll have to pay it back along with all the funds you used to pay for school. And you start paying interest on it as soon as you get it.
Confused? We don’t blame you. Maybe looking at the difference between the definition of a real refund and what you’re looking at with the financial aid refund check will help.
A refund defined
Money you receive back due to having made an excess payment; a reimbursement.
The financial aid refund check defined
The typical definition of the word “refund” implies that you are getting something back because you spent too much somewhere.
But the financial aid refund isn’t actually money you’ve spent. It’s money you’ve borrowed from the government that more than covers what financial aid is needed to cover things like tuition and fees and room and board.
Your total cost of attendance also includes books and supplies, travel, and miscellaneous expenses, all of which are eligible educational expenses where you can use your financial aid loan money.
That’s why you’re offered that check.
It’s not money you have spent or repaid. It’s money you’ve borrowed that you’ll have to pay back later—with interest.