Expert Advice When You Need It Most

Is it legal for a bank to start charging interest on a Federal Stafford student loan weeks before you even recieve the money?

I was given a Unsubsidized Federal Stafford Student loan for college by a bank, which in return relesed the money over to my college. The college has not deposited the loan money to me yet after almost a month for unknown reasons. I contacted the bank that issued the loan and found out I am being charged interest on a daily basis since the time the bank realesed the money to the college. The school seems not to be doing their job. Is this legal?

Save

Attorney answers (1)

Reputation Level 12
Very interesting question. I would call the Dept of Ed Ombudsman to answer that question. Also, many schools hold loan money for a month or so until the refund period has expired. In this way, they assure that you will stay enrolled and will owe the full balance. Otherwise refunding the loan money can be a nightmare. Check with the bursars office regarding that policy.

Can't find what you're looking for? Ask a Lawyer

Get free answers from experienced attorneys.

 
Ask now