As I stated earlier, schools cannot use 19-20 funds to cover 18-19 balances. However, if you get a refund and want to use it to pay the prior balance, that is your decision.
The problem is that you won’t get the refund if you can’t register for classes. Some schools will lift the hold for registration if, after the loan is paid to your account, you will receive a refund large enough to cover the prior balance (they usually give a limited time frame in which you have to pay the balance, or they will drop you from classes). You can then use that refund to pay the prior balance. Not all schools will do this, but it is worth asking (assuming that after all semester costs are covered, you would receive a refund large enough to cover the balance).