FAFSA refund deposit options: Can I redirect loan overages to savings instead of debit account?

YES you can do that!! My daughter did this last year. Just go to your schools financial aid portal and look for something like 'refund preferences' or 'direct deposit setup'. Most schools will let you link ANY bank account for refunds. Dont use those stupid school debit cards they are a RIPOFF!!!

This is actually very doable at most institutions. The BankMobile refund system (or whatever your school uses) should have an option for setting up direct deposit to your existing bank account. Look for a section called "refund preferences" in your student portal or financial aid dashboard. You'll need your routing number and account number from your savings account. Just be aware that some schools have deadlines for setting this up before disbursement - typically 1-2 weeks before the refund date. If you miss that window, they'll default to their system.

Most institutions will allow transfers to any type of account (checking or savings), but a few have restrictions. The only potential issue with using a savings account is that some high-yield accounts limit the number of transactions per month, so you might want to check if your account has those limitations. Otherwise, the routing and account numbers are all you should need - no additional documentation required in most cases.

I tried 2 do this last semester & my school made it SUPER complicated!! Had to fill out like 3 diff forms & still ended up w/ the stupid campus card anyway. Check if ur school uses TouchNet or BankMobile bc each 1 has diff rules

I think I missed some deadline they never told me about lol. But my roommate got it to work for this semester! She said the trick was bugging the bursar office in person not just doing it online

Financial aid administrator here. This is absolutely your right under federal regulations. Schools must provide students with a choice for how to receive their Title IV aid refunds. The specific regulation is 34 CFR § 668.164(d)(4), which requires institutions to present options in a neutral manner and cannot require students to open a specific financial account to receive their funds. If you're having trouble setting up your direct deposit preference online, I'd recommend visiting your school's disbursement office (sometimes called the Bursar, Student Accounts, or Financial Services). Bring your banking information and ask specifically for the "Title IV refund preference form" if you can't find it online.

Has anyone else been getting the runaround when trying to reach the financial aid office? I've been calling for three days about this exact issue and I'm losing my mind with the wait times. I'm #78 in the queue right now!

Be VERY careful about using savings accounts for your loan refunds! My son did this and it caused major problems with his SAI calculation for the next year's FAFSA. They counted his saved loan money as an asset and it increased his expected contribution by almost $2000. Consider keeping loan money in a checking account until you need it so it doesn't hurt your future aid eligibility.

Update: I went to the financial aid office in person this morning, and it was so much easier than I expected! They had me fill out a simple direct deposit form with my savings account info, and they said the change would be reflected in 3-5 business days. The person I spoke with said about 60% of students choose their own bank accounts over the school-provided option. Thanks everyone for your help!

just my 2 cents but make sure you actually SPEND that money on educational expenses since its a loan... my cousin used his refund for a spring break trip and is rlly regretting it now that he has to pay it all back lol

As someone who just went through this process last semester, I'd definitely recommend getting it switched! I was hesitant at first because I thought it would be complicated, but it was actually pretty straightforward. One thing to keep in mind is that some banks (especially credit unions) might have stricter policies about receiving large deposits from third parties, so you might want to give your bank a heads up that you're expecting a financial aid refund. Also, if you're using a high-yield savings account, definitely check those transaction limits that were mentioned earlier - some accounts limit you to 6 withdrawals per month, which could be annoying if you need to access the money frequently for school expenses.

Just wanted to chime in as someone who made the switch from the default school card to my own bank account last year - it was 100% worth it! Not only did I avoid all those random fees (seriously, they charge for EVERYTHING), but having the money in my regular account made it so much easier to budget and track my expenses. One tip: if you're planning to use any of that refund money for textbooks or supplies, consider setting up a separate savings "bucket" or sub-account specifically for school expenses. That way you can still earn interest on money you won't need immediately, but keep it separate from your regular savings so you don't accidentally spend it on non-school stuff. Also totally agree with everyone saying to go in person if the online process gives you any trouble - the financial aid staff are usually super helpful once you can actually talk to them!