If you accept student loans that you no longer need or want, you have the right to cancel all or a portion of your disbursement. Cancellations can be made before or after the disbursement, but it is best to make your request as soon as you know you don’t need the funds. Although the federal government mandates your right to cancellation, each school may set its own time frames and methods for processing cancellation requests. If you choose to do so, you might also be able to cancel any future student loan disbursements from your school in addition to canceling the current disbursement.
Contact the financial aid office at your school for deadlines to submit your cancellation request and instructions for completing the cancellation. This information may also be found on your school's website under the financial aid menu. Each school sets its own deadlines, but most require you to cancel your loans within 10 to 14 days after you receive notice of the pending disbursement.
Prepare a written request. Your financial aid office will require you to submit your cancellation request in writing. Depending on your school’s policies, you may be allowed to prepare your own written statement, or you may be required to complete a specific cancellation request form.
Submit your request. After you have completed the written request, submit it to your financial aid office within the deadline dates provided. Your loan proceeds will be returned instead of disbursed. In most cases, you will not pay any fees or interest related to loan disbursements you cancel within specified cancellation time limits.
If you miss the cutoff date to cancel loans before they are disbursed, the government still allows you to cancel a loan within 120 days of the disbursement date.
You must request a cancellation of your student loans yourself if the loan is in your name. However, if you are cancelling a parent PLUS loan disbursement, either you or the parent responsible for repaying the PLUS loan can request the cancellation.
With a background in taxation and financial consulting, Alia Nikolakopulos has over a decade of experience resolving tax and finance issues. She is an IRS Enrolled Agent and has been a writer for these topics since 2010. Nikolakopulos is pursuing Bachelor of Science in accounting at the Metropolitan State University of Denver.