§ 682.607 - Payment of a refund or a return of title IV, HEA program funds to a lender upon a student's withdrawal.  


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  • § 682.607 Payment of a refund or a return of title IV, HEA program funds to a lender upon a student's withdrawal.

    (a) General. By applying for a FFEL loan, a borrower authorizes the school to pay directly to the lender that portion of a refund or return of title IV, HEA program funds from the school that is allocable to the loan upon the borrower's withdrawal. A school -

    (1) Must pay that portion of the student's refund or return of title IV, HEA program funds that is allocable to a FFEL loan to -

    (i) The original lender; or

    (ii) A subsequent holder, if the loan has been transferred and the school knows the new holder's identity; and

    (2) Must provide simultaneous written notice to the borrower if the school makes a payment of a refund or a return of title IV, HEA program funds to a lender on behalf of that student.

    (b) Allocation of a refund or returned title IV, HEA program funds. In determining the portion of a refund or the return of title IV, HEA program funds upon a student's withdrawal for an academic period that is allocable to a FFEL loan received by the borrower for that academic period, the school must follow the procedures established in part 668 for allocating a refund or return of title IV, HEA program funds.

    (c) Timely payment. A school must pay a refund or a return of title IV, HEA program funds that is due in accordance with the timeframe in § 668.22(j).

    [64 FR 59043, Nov. 1, 1999]