Expiration of the Current Statutory Exceptions to Certain Loan Disbursement Rules for Low-Default Rate Schools

    The U.S. Department of Education (ED) recently released a Dear Colleague Letter (DCL), GEN-02-06, which addresses the impending expiration of exceptions to certain loan disbursement rules for schools whose cohort default rates for the past three years have been less than 10 percent.

    This DCL advises low-default rate schools to prepare to schedule multiple disbursements for single term Federal Family Education Loan Program (FFEL) and William D. Ford Federal Direct Loan (Direct Loan) Program loans for all loans certified or originated on or after October 1, 2002.  Also, delayed disbursement provisions for first-time, first-year undergraduate borrowers will be required if the statutory exceptions to these rules are allowed to expire on September 30, 2002.  Should the expiration date be extended prior to September 30, ED will notify the community immediately.

    A copy of GEN-02-06 is available on ED's web site in the Recently Published Letters within the Dear Partner (Colleague) Letters link at www.ifap.ed.gov/dpcletters/GEN0206.html.  If you are unable to access ED's web site and would like a hard copy, please contact Stacey Fabros at (801) 321-7211.  Any questions regarding this Bulletin should be directed to the UHEAA Policy and Training Department at (801) 321-7166, or by e-mail to mjohnson@utahsbr.edu.