So, the way a school handles financial aid is that it discounts your tuition/room and board bill. In the same way that your tuition is divided into quarterly, semesterly, or monthly payments, depending on the school you or your student will attend, your financial aid will also be divided evenly and discounted from your regular bill.

Any financial aid you receive above and beyond the bill you'd receive from the school is usually disbursed as a stipend at the beginning of the quarter.