5 Ways to Maximize Your Student Loan Disbursements

Student loans are a good way to help pay for college. However, it’s important to manage student loan disbursements wisely. Guest blogger Raya Reaves of City Girl Savings shares her top tips for budgeting and managing student loan disbursements so you can be in great financial shape when you graduate.

Raya ReavesBy Raya Reaves, Founder and Finance Coach for City Girl Savings, LLC.
Sponsored by Regions Bank, Member FDIC. All thoughts are my own.

Congratulations! You made it to college! Now, it’s time to pay for it. Thankfully, there are plenty of options to choose from when applying for student loans. But first, you may want to check out Regions’ article, Loans for Students: What Can They Cover? You’ll learn all about exactly how you can leverage your student loans.

Now in this post, I plan to guide you through how you should budget out your student loan disbursements when you receive them. That’s why I’ve teamed up with Regions Bank to make sure you keep these things top of mind when managing your student loan funds.

#1: Only Take What You Truly Need

When the time comes to receive your student loan disbursements, you may be surprised at how much is offered to you. Unfortunately, you may be offered more in available loans than you really need. I encourage you to fight the urge to take every penny you are offered. If you take it all, you must pay it back.

You may be thinking “of course, I have to pay it back.” However, remember that you have to pay it back…with interest. With that said, I want to share a statistic with you. According to the Institute for College Access and Success, borrowers in the class of 2017 owe an average of $28,650. Imagine owing that before you even potentially have a job lined up.

Going back to my earlier point, only take what you truly need. So, how do you know what you need? Think about how long that money needs to last you. Usually, student loan disbursements are done by session term. So, if your school’s term is by semester, then disbursements may be paid for the semester. That means your loan amount needs to last through multiple months.

Your student loan disbursement will need to cover your tuition, housing, school supplies, food, minimal living expenses, cell phone, transportation, and anything else specific to your situation. By adding up the total amount for all of your expenses for the semester, you can estimate exactly how much you will need. To avoid underestimating food or transportation costs, give yourself a little wiggle room on those line items.

Remember, you will need to pay back whatever loans you take out. Only take what you need to make sure you are in the best position possible when graduation comes around.

#2: Don’t Get Too Distracted by the Large Lump Sum

Regardless of whether your disbursement is given for the term or the year, don’t let the large loan award amount distract you. It can be exciting to see all of that money coming your way, but you should already know what you’ll need to take out to cover your school’s term. When you know this information, the large lump sum doesn’t seem all that exciting.

After all, it needs to last you until the end of the semester, and maybe longer. If you will be staying on campus after the semester, or if you plan to take a winter or summer course, you may need that loan amount to hold you longer. You also may be tempted to spend the lump sum that comes your way. Avoid the temptation by making sure you understand that this money needs to last you for some time. You won’t get any more until the next disbursement date.

#3: Make Sure Your Priorities are Covered First

If you have any tuition, housing, books and school supplies costs, take care of those right when you get your student loan disbursement. Take care of it! Get it out of the way. Not only will you feel better knowing that your primary school expenses are covered, you won’t have to worry about mistakenly spending it. Your priorities always need to come first.

Once any required bill or expense that can be paid is paid, parse out what you have left. The remaining amount should cover things like food and groceries, transportation costs (think insurance and gas), and monthly expenses like your cell phone bill. How many months will you need to pay those expenses until your next disbursement? Divide the total amount you have for those expenses by the number of months you need that money to last you. That is how much you can spend each month on all those expenses.

Not sure what you should be spending on those types of monthly expenses? Check out this article on How to Budget for Daily College Life for some tips! You certainly don’t need to deprive yourself, but you also don’t want to go overboard with your spending. This money needs to last!

#4: Put the Extras in a Separate Bank Account

To help make sure you don’t overspend your monthly allotment (or your next semester’s funding), I recommend putting what you don’t need in a separate bank account. There are plenty of free or low-cost bank account options available to you.

You can have your primary checking account, which only has the money you need for the month ahead, and any extra money should be put into a savings account or separate checking account. The point is, you don’t want money that needs to last you the next 2 or 3 months mixed in with the money you need right now. That is simply too much temptation for some. When the money you don’t need now is out of sight, ideally, you won’t even think to miss it.

This tip still requires some effort on your part. The money is in a separate account, making it easier for you to forget about it, but that doesn’t necessarily mean you won’t spend it prematurely. You still need to make a conscious effort to budget appropriately. Pace yourself with the money in your primary checking account. Remember, when you start tapping into your “future” month’s funds, you are giving yourself less to live on when those months come around.

#5: Find Ways to Make Money…Any Amount of Money

Are things simply too tight? Do you want some extra money to explore your college town or go to events with friends? Instead of taking out more student loan award money, find ways to make money! Even if it’s a small amount, you can use anything earned to cover your fun spending. You could work at a local bookstore, drive with an app service, become a tutor, or even freelance.

You aren’t limited to what’s on campus, although you usually get some cool perks if you do work for your school. Call your financial aid office as soon as you get accepted to ask about federal work-study programs.

Another option could be applying for scholarships. Scholarships can help you with the costs of school, allowing you to take out less in student loan disbursements. Read this article on Five Tips for Finding Scholarships for some great ideas on how you can find and apply for scholarship money.

There’s no debating that your schooling comes first, but if you have free time an extra income source can do wonders for your college experience! You may even start your own savings. Who knows how big it will be by the time you graduate.

As a college graduate myself, there’s nothing better you can do for you future than making sure you are in the best financial position when you graduate. Finding a job may take longer than you think. You may not make as much money as you hope. Anything could come up and delay your student loan repayment progress. But you can always make your life easier by following the tips above and managing your student loan disbursements as best you can. Remember, with the right attitude, you’re destined for great things!

City Girl Savings was founded by Raya to teach and empower women to reach financial success through better budgeting processes, money mindset shifts, debt help, and true spending accountability. City Girl Savings provides educational articles, personalized budget plans, financial coaching and more!


This information is general in nature and is not intended to be legal, tax, or financial advice. Although Regions believes this information to be accurate, it cannot ensure that it will remain up to date. Statements or opinions of individuals referenced herein are their own—not Regions'. Consult an appropriate professional concerning your specific situation and irs.gov for current tax rules. Regions, the Regions logo, and the LifeGreen bike are registered trademarks of Regions Bank. The LifeGreen color is a trademark of Regions Bank.