How Federal Student Loans Are Disbursed

Federal student loans are education loans provided to students by the U.S. government. If you qualify for a federal student loan, your loan funds will be dispersed by the financial aid office at the college or university you attend.  

Exit Counseling

After your federal student loan application is approved, you cannot access the funds until you complete exit counseling through your school’s financial aid office. Exit counseling is a short online course designed to help you understand your repayment obligations on the student loan. You need to complete exit counseling only for your initial disbursement, even if you renew the loan annually.  

Signing the Promissory Note

After exit counseling, you must sign a promissory note at your school’s financial aid office. The promissory note is merely a legal document stating that you understand your obligations and agree to repay the full amount of the education loan, plus interest. Some colleges and universities allow you to sign an online promissory note using a four-digit PIN and your typed signature.


The federal government will send the student loan funds to your school’s financial aid office after it receives evidence that you completed exit counseling and signed a promissory note. Your financial aid office will notify you as soon as the funds arrive, and you may pick them up. For more information on federal student loan disbursement, visit

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