She also said this:
It's not clear why she would apply for multiple loans despite her belief that she did not qualify for student loans. Also, neither unsubsidized Stafford loans nor SLS loans are need-based.
It seems quite possible that the money was disbursed to the school and distributed along with any stipend, or perhaps that the distributions were mistaken for a stipend. I can't rule out the exceptionally small possibility that the loan applications were denied yet somehow reflected in the bank's records as having been paid, but if it were me I would start with the much more probable possibility -- that the money went to the nursing school -- and investigate that angle.

