Loan disbursements
Could you explain this fact to me.
All subsequent disbursements of loans should occur no later than the start of the standard term, nonstandard term, or payment period.
I was my understanding that the PELL is disbursed first before direct loans. Loans are disbursed 31 days after student start date of a clock hour program. I am fresh to the system and am still learning. Thx.
Chris
Christopher ,
A first time borrower is subject to a 30-day delay on his or her first disbursement of direct loans; however, all subsequent disbursements are not required to be delayed. Many institutions select to delay disbursements of direct loans but there is not regulatory requirement other than the one related to first disbursement on a first time borrower.
Sincerely, Chyrl
Chyrl Ayers
Our school struggles with retention rates. Because of this our office has decided to delay funding, to ensure the students reach a certain level of completion within their quarter. It seems to work well, the amount of Title IV returns is low, ensuring the student isn't in even more debt than they would be if they complete their quarter.
Sarah,
There are other institutions taking similar approaches and encouraging success in the classroom first. What type of reaction have you received from your students? Are your students open to this approach. Are you processing the requesting aid (such as originating) and delaying disbursements?
Sincerely Chyrl
Chyrl Ayers
The students don't typically dispute when they will receive their funds. We explain that every school disburses their aid differently, and we tell them during their appointment when they can expect their aid. For current students its during the fourth week of the new quarter, and for new and re-entry students it's during the eighth week. New and re-entry cannot be originated until 30 days after the start of classes, and we then allow 30 additional days to originate and process their funds. This puts them beyond the time frame that would require a return to the Department of Education should they withdrawal or have to be terminated. We generally have few returns that we have to process, and it seems to work out well.
Sarah,
Your college seem to have great line of communication for your students. Ensuring the student understands the process and the process works for your students and staff is important to the success. The fact that your process works well for all with limited returns is added bonus.
Sincerely, Chyrl
Chyrl Ayers
