34 CFR 668.167 - FFEL Program funds.

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§ 668.167 FFEL Program funds.
(a) Requesting FFEL Program funds. In certifying a loan application for a borrower under § 682.603
(1) An institution may not request a lender to provide it with loan funds by EFT or master check earlier than—
(i) Twenty-seven days after the first day of classes of the first payment period for a first-year, first-time Federal Stafford Loan Program borrower as defined in § 682.604(c)(5); or
(ii) Thirteen days before the first day of classes for any subsequent payment period for a first-year, first-time Federal Stafford Loan Program borrower or for any payment period for all other Federal Stafford Loan Program borrowers; and
(2) An institution may not request a lender to provide it with loan funds by check requiring the endorsement of the borrower earlier than—
(i) The first day of classes of the first payment period for a first-year, first-time Federal Stafford Loan Program borrower as defined in § 682.604(c)(5); or
(ii) Thirty days before the first day of classes for any subsequent payment period for a first-year, first-time Federal Stafford Loan Program borrower or for any payment period for all other Federal Stafford borrowers; and
(3)
(i) An institution may not request a lender to provide it with loan funds by EFT or master check for any Federal PLUS Program loan earlier than 13 days before the first day of classes for any payment period.
(ii) An institution may not request a lender to provide with loan funds by check requiring the endorsement of the borrower for any Federal PLUS Program loan earlier than 30 days before the first day of classes for any payment period.
(b) Returning funds to a lender.
(1) Except as provided in paragraph (c) of this section, an institution must return FFEL Program funds to a lender if the institution does not disburse those funds to a student or parent for a payment period within—
(i) Ten business days following the date the institution receives the funds if the lender provides those funds to the institution by EFT or master check on or after July 1, 1997 but before July 1, 1999;
(ii) Three business days following the date the institution receives the funds if the lender provides those funds to the institution by EFT and master check on or after July 1, 1999; or
(iii) Thirty days after the institution receives the funds if a lender provides those funds by a check payable to the borrower or copayable to the borrower and the institution.
(2) If the institution does not disburse the loan funds as specified in paragraph (b)(1) or (c) of this section, the institution must return those funds to the lender promptly but no later than 10 business days after the date the institution is required to disburse the funds.
(3) If an institution must return loan funds to the lender under paragraph (b)(2) of this section and the institution determines that the student is eligible to receive the loan funds, the school may disburse the funds to the student or parent rather than return them to the lender provided the funds are disbursed prior to the end of the applicable timeframe under paragraph (b)(2) of this section.
(c) Delay in returning funds to a lender. An institution may delay returning FFEL program funds to a lender for—
(1) Ten business days after the date set forth in paragraph (b)(1) of this section if—
(i)
(A) The institution does not disburse FFEL Program funds to a borrower because the student did not complete the required number of clock or credit hours in a preceding payment period; and
(B) The institution expects the student to complete required hours within this 10-day period; or
(ii)
(A) The student has not met all the FFEL Programs eligibility requirements; and
(B) The institution expects the student to meet those requirements within this 10-day period; or
(2) Thirty days after the date set forth in paragraph (b) of this section for funds a lender provides by EFT or master check if the Secretary places the institution on the reimbursement payment method under paragraph (d) or (e) of this section.
(d) An institution placed under the reimbursement payment method.
(1) If the Secretary places an institution under the reimbursement payment method for the Federal Pell Grant, Direct Loan or campus-based programs, the institution—
(i) May not disburse FFEL Program funds to a borrower until the Secretary approves a request from the institution to make that disbursement for that borrower; and
(ii) If prohibited by the Secretary, may not certify a borrower's loan application until the Secretary approves a request from the institution to make that certification for that borrower.
(2) In order for the Secretary to approve a disbursement or certification request from the institution, the institution must submit documentation to the Secretary or entity approved by the Secretary that shows that each borrower included in that request whose loan has not been disbursed or certified is eligible to receive that disbursement or certification.
(3) Pending the Secretary's approval of a disbursement or certification request, the Secretary may—
(i) Prohibit the institution from endorsing a master check or obtaining a borrower's endorsement of any loan check the institution receives from a lender;
(ii) Require the institution to maintain loan funds that it receives from a lender via EFT in a separate bank account that meets the requirements under § 668.163; and
(iii) Prohibit the institution from certifying a borrower's loan application.
(e) An institution participating solely in the FFEL Programs. If the FFEL Programs are the only title IV, HEA programs in which an institution participates and the Secretary determines that there is a need to monitor strictly the institution's participation in those programs, the Secretary may subject the institution to the conditions and limitations contained in paragraph (d) of this section.
(f) An institution placed under the cash monitoring payment method. The Secretary may require an institution that is placed under the cash monitoring described under paragraph § 668.162(e), to comply with the disbursement and certification provisions under paragraph (d) of this section, except that the Secretary may modify the documentation requirements and review procedures used to approve the institution's disbursement or certification request.
(Approved by the Office of Management and Budget under control number 1840-0697)
(Authority: 20 U.S.C. 1094)
[61 FR 60603, Nov. 29, 1996, as amended at 62 FR 27128, May 16, 1997; 62 FR 62877, Nov. 25, 1997; 63 FR 40626, July 29, 1998; 69 FR 12276, Mar. 16, 2004]

Title 34 published on 2013-07-01

The following are only the Rules published in the Federal Register after the published date of Title 34.

For a complete list of all Rules, Proposed Rules, and Notices view the Rulemaking tab.

  • 2013-11-01; vol. 78 # 212 - Friday, November 1, 2013
    1. 78 FR 65768 - Student Assistance General Provisions, Federal Perkins Loan Program, Federal Family Education Loan Program, and William D. Ford Federal Direct Loan Program
      GPO FDSys XML | Text
      DEPARTMENT OF EDUCATION, Office of Postsecondary Education
      Final regulations.
      Effective date: These regulations are effective July 1, 2014. Implementation dates: For implementation dates, see the Implementation Date of These Regulations section of the SUPPLEMENTARY INFORMATION section.
      34 CFR Parts 668, 674, 682, and 685

Title 34 published on 2013-07-01

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 34 CFR 668 after this date.

  • 2013-11-01; vol. 78 # 212 - Friday, November 1, 2013
    1. 78 FR 65768 - Student Assistance General Provisions, Federal Perkins Loan Program, Federal Family Education Loan Program, and William D. Ford Federal Direct Loan Program
      GPO FDSys XML | Text
      DEPARTMENT OF EDUCATION, Office of Postsecondary Education
      Final regulations.
      Effective date: These regulations are effective July 1, 2014. Implementation dates: For implementation dates, see the Implementation Date of These Regulations section of the SUPPLEMENTARY INFORMATION section.
      34 CFR Parts 668, 674, 682, and 685