The way I understand it, is you apply for loans yearly, and then it gets released at the beginning of each tri-mester/semester. I don't think you get charged interest until it gets released each time.
Confirmed. With few exceptions, you can get approved for up to one year's COA (less the value of other aid) at a time. Every lender I've come across requires the school to certify the amount of the loan, so that you can't double dip with multiple lenders (although you can split the amount across multiple lenders). When the school certifies the loan, they provide a disbursement schedule to the lender. If a school is on the quarter system, a $60,000 loan will typically be split in (3) $20,000 payments to the school. Any money in excess of tuition and fees owed would then be refunded to you by the school. Interest only accrues on the portion that has been disbursed. Many schools require the 3 payments to be equal for each term, even if your tuition and fees aren't. This can create cashflow issues (because of 1st quarter, one-time expenses) if you're not paying attention.