Every school year, students anxiously await their college refund check. These financial aid checks act as a much-needed cushion to help college students with their many expenses. Because college education, though extremely worthwhile and beneficial, can be a very pricey and expensive investment, more college students are needing financial help more than ever.
What is a college refund check and how does it work?
First and foremost, a college student is given a grant of financial aid money to be used towards “educational purposes.” This is usually limited to tuition and fees and student housing. But once those expenses have been covered, the leftover money is given as a check to the student to use. These checks are usually handed out within the first days of the semester.
According to Garrett, the average college refund check is around $2,000. This is a large amount of money for a student to freely use—and many students are left wondering what to do with this huge deposit into their bank account.
What should I do with my check?
Many students quickly assume that their refund checks are free money, but the sad reality is that they are not. Because it is tied to a financial aid grant, you still owe the money, and will have to eventually pay it back with added interest. Additionally, if a student decides to withdrawal from classes, their university will usually require them to return that money. (Source: HowStuffWorks)
So, what is the smartest way to use your college refund check? There are many smart ways to use your money to help you out financially in the long run. And no, you should not spend your check on a Lego Star Wars set.
Here are some ideas:
- Defer payments on your loan
Because you will owe the amount of money on your loan back anyways, you can get ahead of the game and start to lower the amount you owe. This will help you to start managing your loans and will lessen the amount on your back when you finish your degree.
- Use for books and other school supplies
Textbooks and other supplies for your classes can cost an upward of hundreds of dollars each semester. Instead of paying out of pocket for those pricey books, use your college refund check to give your wallet a little break.
- Save for later
You never know in the future when you might be tight on cash or need extra money for a random parking ticket or for rent. Having extra money for a rainy-day fund, can save you from many stressful situations.
Try any of these tips next time you are handed your college refund check. Looking for a college major perfect for you?