Do Student Loans Cover a Semester or Year?

Whether you’re seeking federal or private student loans, applying for loans can raise many questions. For instance, you might wonder whether student loans cover a semester or a year. 

You’ll be covered for the entire academic year if you’ve completed the Free Application for Federal Student Aid (FAFSA) for federal loans. With private student loans, lenders can offer funding for the entire year or per semester. 

Not sure which you need? Here’s a closer look at how student loan funds are disbursed and how often you’ll need to reapply to pay for school. 

In this guide:

• Are federal student loans per semester or year?
• Are private student loans per semester or year?

Are federal student loans per semester or year?

When you complete the FAFSA, the Department of Education will send you an award letter detailing the federal student aid for which you’re eligible. That might include federal student loans, Pell grants, or work-study funding. 

Federal student loans cover one full academic year, including the fall, spring, and summer semesters. In most cases, your school disburses your federal student loan funds at least once per term, which may be semesters, trimesters, or quarters. Some schools disburse funds instead at the beginning and halfway points of the academic year. 

Rules to know about the disbursement of federal student loans include the following:

• If you’re a first-year undergraduate and first-time borrower, you may be subject to a 30-day waiting period to get funds from the school. It begins after the first day of your enrollment period.
• First-time borrowers of Direct Subsidized or Unsubsidized loans must complete entrance counseling before the school can disburse loan money.
• Graduate and professional students taking out Direct PLUS Loans for the first time must complete entrance counseling before accessing loan funds. 

The amount of funding you’re eligible to receive can depend on your year of enrollment, the type of loans you qualify for, and your dependency status. 

Schools apply your federal loan funds toward your tuition, fees, and room and board if you’re living on-campus on a per-term basis. The school then pays out any money that’s left over to you. 

Note: FAFSA is only good for one year. You’ll need to renew your eligibility for student aid by resubmitting your FAFSA annually. The good news is you’ll often just need to:

• Update income information.
• Update tax information.
• Double-check all your personal information to ensure it’s still correct.

You could choose to start a new FAFSA, but that isn’t necessary in most cases unless you’re changing from dependent to independent status. Each time you renew your FAFSA, the Department of Education will review your information to determine the amount you’re eligible to receive for the new academic year. 

So the amount of aid you receive can change from one year to the next. However, changes to your aid amount shouldn’t affect your school’s schedule for disbursing those funds. 

>>Read more: How many student loans can I take out?

How do my federal student loans change if I only attend school for one semester?

You might take a semester off school for various reasons. You may be working, completing an internship, caring for a family member, or taking a mental health break. But what happens to your loans?

Taking a semester off school means there’s nothing to disburse for that period. You’d need to notify the financial aid office you don’t plan to enroll that semester. Your school would still disburse funds as scheduled when you’re attending classes to cover your costs of attendance.

Remember: Federal student loans have a six-month grace period in which no payment is due. The grace period covers six months after you graduate, drop below half-time enrollment, or leave school. If you plan to take a semester off, reenroll within that six-month window to avoid putting your loans into repayment. 

Are private student loans per semester or year?

Banks, credit unions, and private lenders offer private student loans. You can apply for a private student loan any time, regardless of when the academic year or semester begins. 

Once you’re approved for student loans, most lenders send funds to the school, though some may send funds to you. Schools can set the dates for funds to disburse, often at the beginning of each semester you’re enrolled. So if you’re attending school in the fall and spring semesters, the institution will disburse half the funds each term. 

How much private student loan funding should you apply for? If you’re planning to apply for private student loans, the amount you request can depend on:

• Whether you’re also receiving federal student aid
• Your costs of attendance at your chosen school

Most private lenders offer loans that cover up to 100% of your cost of attendance, less any financial aid you’ve received. 

For example, if your cost of attendance is $30,000 per year, and you’re getting $20,000 in federal aid, you’d need to take out a $10,000 private student loan to cover the gap. 

Similar to federal loans, private student loans cover a single academic year. Some lenders may allow you to apply for funding on a per-semester basis. You’ll need to reapply each academic year or semester for which you anticipate needing funds. 

How do my private student loans change if I only attend school for one semester?

As mentioned, private student loans often follow the school’s disbursement schedule. If your school disburses funds at the beginning of each semester, and you enroll for the fall term only, it won’t disburse money for the spring term. 

You’re not obligated to repay loan funds until they’re disbursed. So if you decide to skip a semester, and your school doesn’t disburse the money to you, you won’t need to return anything to the school. However, you need to let the school know you’re not planning to enroll for the upcoming semester. 

Keep in mind: The school may have a deadline for canceling student loan disbursement. If you’re confident you won’t need additional loan funds because you’re not planning to attend, it’s wise to contact your financial aid office as soon as possible.