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I am studying at a US university, on a student loan from a UK company - funds are paid directly to the university.

The loan provider already disbursed the loan amount to my university's finaid division, but now I have received a tuition waiver so I don't require all of it.

When I told the loan provider this, they said:

You will need to inform your school's financial aid office to return any unused funds to us. However, please note that refunds take 3 - 6 months to be received as this is a US regulation. You will be charged interest for this time.

What is my best course of action here? Is there a way to reduce the money I'm charged for? I'm not even sure what these regulations are.

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  • Will the school disburse the funds to you instead of returning them? You could then make a payment to the UK lender directly.
    – D Stanley
    Commented Dec 28, 2023 at 14:45
  • @DStanley I thought so too. But the rules are that the tuition payment is done directly to the school.
    – spatial
    Commented Dec 28, 2023 at 15:15
  • But if they send the school the entire loan amount (which is more than the total tuition), you'll have a credit balance with the school. Can they not give you the remaining balance so you can pay the lender? I know of no US financial regulation that would withhold funds for months. Maybe a week or so, but not months.
    – D Stanley
    Commented Dec 28, 2023 at 15:39

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