magnifying glass with money/refund check

Why The Term “Refund Check” Is Misleading

Why Your Refund Check Isn’t Actually A Refund

“Then what is a refund check???” Keep reading. 🙂

magnifying glass with money/refund check

As the semester begins, financial aid will be distributed to student accounts. I hear all too often about the “refund check” students get.  (Even though I hate the term “refund check”, I will be using that term throughout this post for the sake of clarity.) 

If you are a student who needed to take out loans to finance your education, pay attention.

This post is for you.

What is a Refund Check?

In college, a refund check is an excess of money that you’ve borrowed/received. When you accept a certain amount of money (loans/grants/scholarships) to help pay off what you owe to the school, any excess amount is given to you to spend as you choose on school-related expenses. If you took out loans, that money needs to be repaid.

Your tuition, fees, room, and board will all be paid for first. Your scholarships and grants will be applied to your account before any loans. Whatever is left will be given to you in the form of a check, debit card, or deposited into your bank account. Each institution is different.

Most schools will require you to submit the FAFSA to apply for loans, grants, or scholarships. Here are more basics of the financial aid process: Financial Aid: What is it, and how does it work?

Why I Hate The Term “Refund Check”


1. a repayment of a sum of money, typically to a dissatisfied customer.

Man, I hate that term so much. Why? You haven’t paid them anything, so they aren’t repaying you!  

Why financial aid offices around the country choose to call your EXCESS FINANCIAL AID a refund check is beyond me. I prefer the terms “financial aid excess check” and “overage check” or something that describes what it actually is.  I guess it doesn’t have the same ring to it, though, does it? Ugh.

I primarily hate calling it a financial aid refund check when there are student loans involved. Some students think that because it’s a “refund”, they are not responsible for paying back their loans. I don’t know how that’s possible, but it happens.

And some families forget they even took out loans! I think I need to start a post on mindfulness in college.

If you’ve gotten grants and scholarships where you don’t have to pay any of the money back, call the extra money whatever you want! haha

Financial Responsibility

A lot of financial responsibility is tied to being a college student.  If you get a large sum of money in the form of a refund check, it might be the most money you’ve ever had to your name. It’s so tempting and easy to go out and blow it on things you want.

If you live your college years the way many college students won’t, you’ll be able to live the rest of your life doing things other adults can’t.

What I mean by that is – if you are fiscally responsible and save more than you spend, you will be further ahead with your finances (not to mention retirement – yes, you should already be thinking about that) than your peers. 

I will give some budgeting tips in another post. Stay tuned!

Final Thoughts

Please don’t think of that excess money as an actual refund. A refund means you paid the school too much money, and they are giving it back to you. Another entity actually paid the school too much money on your behalf. A real refund would be if the school sent that extra money back to the source it came from. 

If there are loans involved, you will be paying that money back to the servicer – with interest.

Would you be less likely to spend the excess money if it was called something other than a refund check?  Do you think it should be called something different? Let me know in the comments!

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One Comment

  1. Tracy Crippin-Haake says:

    Brilliant advice!