Publication Date: May 20, 2008
Author: William Leith, Acting General Manager, Application, Operations and Delivery Services, Federal Student Aid
Summary: Change to Late Disbursement Regulations and Discontinuation of "Late" Late Disbursement Approval Request Process Effective July 1, 2008
Posted on 05-20-2008
As explained below, final regulations that were published on November 1, 2007 amended the provisions that allow schools to make late disbursements of Federal student aid authorized under Title IV of the Higher Education Act of 1965, as amended (HEA). As a result of these changes, which take effect July 1, 2008, we will be discontinuing the process outlined in Dear Colleague Letter GEN-05-13 by which schools may request approval to make late disbursements beyond the regulatory late disbursement period. Late disbursements beyond the regulatory late disbursement period have commonly been referred to as "late" late disbursements.
The purpose of this communication is to remind schools and third party servicers of the upcoming regulatory change and to provide information about the schedule for discontinuing the "late" late disbursement approval request process.
We provide information in the following order:
Current Regulations - Through June 30, 2008
Under the regulations, a student or parent generally becomes ineligible to receive Title IV funds on the date that the student is no longer enrolled for the award year for which a Title IV grant or Federal Perkins Loan award was intended, or, for a loan under the Federal Family Education Loan (FFEL) Program or the William D. Ford Federal Direct Loan (Direct Loan) Program, on the date the student is no longer enrolled at least half-time for the loan period.
If certain regulatory requirements are met, the current late disbursement regulations allow a school to make a late disbursement of Title IV funds within a 120-day period after the date that the student ceases to meet the enrollment eligibility requirements for receiving Title IV aid. Current regulations allow a school to make a late disbursement beyond this 120-day period only with the approval of the U.S. Department of Education (the Department), and only if the reason the late disbursement was not made within the 120-day period was not the fault of the student. See 34 CFR 668.164(g). The Department issued guidance on the process for requesting approval to make a late disbursement beyond the 120-day period in Dear Colleague Letter GEN-05-13 posted on the Information for Financial Aid Professionals (IFAP) Web site.
New Regulations - Effective July 1, 2008
The Department issued new regulations on November 1, 2007 (72 FR 62014) that made two changes to the late disbursement requirements described above. The new regulations, which take effect July 1, 2008, modify the late disbursement provisions in 34 CFR 668.164(g) as follows:
Schedule for Discontinuing "Late" Late Disbursement Approval Request Process
Currently, schools and third party servicers follow the process outlined in Dear Colleague Letter GEN-05-13 to request approval to make a "late" late disbursement-a disbursement beyond the current 120-day late disbursement period. Schools and third party servicers may continue to follow the "late" late disbursement approval request process through Monday, June 30, 2008; however, beginning Tuesday, July 1, 2008 (the effective date of the new late disbursement regulations), we will discontinue the "late" late disbursement approval request process.
We will accept and process "late" late disbursement approval requests received by fax through midnight (ET) on Monday, June 30, 2008. All of the current requirements for submitting such requests continue to apply. Specifically:
We will not accept or process "late" late disbursement approval requests received on or after Tuesday, July 1, 2008:
If you have any questions about the information in this announcement, you may e-mail email@example.com or call Nicki Meoli at 202/377-4031.