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Returning Unneeded Loan Funds

Returning anticipated unneeded Federal Loan Funds

If you anticipate having unneeded funds for a future disbursement (not applied to your tuition bill yet), contact your financial aid counselor to cancel or reduce the upcoming disbursement at least fifteen days before your semester begins.

Returning unneeded Federal loan funds after they have been disbursed to you

Students are strongly encouraged to return any unneeded loans.  This will reduce your debt, which will benefit both you and the institution in the long run.  

Within the first 120 days of when the loan was disbursed to your tuition account, a school may return unneeded Federal Direct Loans back to the government on a student's behalf.  Funds returned within this timeframe will have interest accrual and loan fees eliminated.  However, it may take up to two weeks for a return request to be fully processed and returned, so MUSC's practice is to ask students who wish for MUSC to return excess loans on their behalf to submit the form linked below within 106 days of disbursement.

Students may, of course, return funds on their own at any time but loans returned directly by students to their loan servicer are not reflected in a student's updated award letter, and any loans returned after 120 days will still incur interest and fees.

How to return unneeded Federal loans within the first 106 days

  1. Complete the Request to Return Loan Funds Form and send to your Financial Aid Counselor.
  2. Your loans will be returned to the lender.
  3. Plan ahead.  Please do not wait until the last minute to submit your Return of Funds Form.  Allow up to two weeks for processing the Return of Loan Funds through the school.

How to return unneeded Federal loans after the first 106 days

If you are returning a borrowed amount more than 106 days after disbursement you will need to make that payment directly to your loan servicer.  Your loan servicer is assigned to you by the US Department of Education.  Loan Servicer information is listed in the National Student Loan Data System.

Returning Private Loan Funds

Borrowers of Private Loans should contact their Lender directly on their specific procedure of returning unneeded loan funds to them.