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Guidance Issued on "Late" Late Disbursements of Title IV Aid

April 21, 2005

The Department of Education issued guidance detailing procedures that institutions must follow to request approval to make disbursements of Title IV aid more than 120 days after a student ceases to meet enrollment eligibility requirements. Such disbursements are sometimes referred to as "late" late disbursements to distinguish them from late disbursements made within 120 days after a student is no longer enrolled (which institutions may make without prior approval from ED). ED will only grant approval if the reason the late disbursement was not made within 120 days is not the fault of the student (or the parent in the case of a PLUS loan).

The Dear Colleague letter (GEN-05-07) requires the institution or its third-party servicer to fax the request to ED for approval of a "late" late disbursement. Lenders, guaranty agencies, or other parties may not submit the request regardless of the reason the funds were not disbursed. The letter details the information to be provided. ED will respond to the institution by e-mail, normally approving or denying the request within 10 days after it passes initial screening.

ED urges institutions to develop procedures to track disbursements and improve communication among the financial aid, business, and registrar's offices to ensure that late disbursements are made in a timely manner.