OGSLP Online News

Post 120-Day Late, Loan Disbursements

Late Disbursement provisions were extended from 90 days to 120 days as a result of the November 1, 2002 Final Regulations. Schools may deliver loan funds to students no later than 120 days after the school determines the students withdrew, or, if the students did not withdraw, 120 days after the earlier of the end of the loan periods or the dates on which the students ceased to be enrolled at least half-time. ED no longer requires a lender to provide a school with formal notification when it makes a late disbursement.

On an exception basis, the new regulations allow a disbursement to be made even later than 120 days if the student is not at fault. However, in this case, the school must obtain approval from ED prior to delivering the funds. ED is currently developing a web-based process for requesting approval. In the meantime, interim procedures have been established.

To receive the required approval to deliver loan funds after the 120-day period, a school must fax the request to Jeff Baker or Pat Newcombe, Department of Education, Policy and Implementation, at (202) 275-4522. The request must include the following information:

• Student name and Social Security number
• Loan type and amount
• Enrollment period end date
• School name and OPE ID number
• School contact person's name, phone number, and email address
• Lender and guarantor information
• Reason for requesting the disbursement beyond 120 days

Only schools are permitted to submit this request. The school must notify the lender or OGSLP upon the receipt of any subsequent approval to initiate the disbursement of loan proceeds, as applicable. For more information on the current policy requirements, refer to 34 CFR §668.164(g) and subsection 8.7.E of the 2003 Common Manual. You may also contact OGSLP's Loan Services department at (405) 234-4331 or (800) 442-8642 if clarification is needed.