Federal student aid (i.e. FAFSA) funds are sent to the college, where the school's direct charges, such as tuition and fees, are deducted. If there is money left over after those charges are paid, then the school will refund it back to you, usually in the form of a check, debit card or deposit into an e-refund account that you set up. You can then use those funds for other educational expenses, such as books. Federal student aid funds are never disbursed directly to private businesses.