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This fall, tens of thousands of college students will receive refunds from grants or loans intended to pay for out-of-pocket educational expenses. Sallie Mae, the nation’s no. 1 financial services company specializing in education, offers tips to help students manage these tuition refunds wisely.
Sallie Mae recommends students keep the following considerations in mind to best manage their tuition refund:
Consider all options for receiving your money. Choose the refund method—check, automatic ACH deposit or debit card—that works for you and your banking habits and closely review all the details.
Avoid unnecessary fees. Understand any fees associated with your chosen refund method and steps you can take to avoid them. If opting for a check be sure to have a free or low-cost way to cash it. Students without a bank account who opt for a check often pay high check cashing fees. If choosing ACH into an existing checking account, be mindful of possible fees to transfer your money and fees associated with the account, especially ATM, non-sufficient funds (NSF) and monthly fees. If you want the convenience of a debit card, study up on how to avoid unnecessary charges.
If selecting debit, choose one that doesn’t allow overdrafts and has access to convenient fee-free ATMs. Ensure you’ll avoid costly ATM charges as well as NSF and penalty fees with an account that doesn’t allow spending more than you have.
Use financial aid refunds only for college costs. Keep careful track of your budget and be sure to use funds only for the intended educational purpose. For example, if your money is for an off-campus apartment, put it aside so it’s available when the rent is due.
Follow a budget. Plan what you’ll need for housing, groceries, books and supplies for the semester.
Return extra funds. If you received more than you need, immediately return the extra to reduce your borrowing and avoid unnecessary interest expense. Your future self will thank you.
Bank on the go. Mobile banking apps can help you check your balance before making a purchase, find a fee-free ATM, and some even offer text alerts so you know when your refund has been deposited.
Sallie Mae (NASDAQ: SLM) is the nation’s No. 1 financial services company specializing in education. Whether college is a long way off or just around the corner, Sallie Mae turns education dreams into reality for its 25 million customers. With products and services that include 529 college savings plans, Upromise rewards, scholarship search tools, education loans, insurance, and online banking, Sallie Mae offers solutions that help families save, plan, and pay for college. Sallie Mae also provides financial services to hundreds of college campuses as well as to federal and state governments. Learn more at SallieMae.com. Commonly known as Sallie Mae, SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.