Direct	Loan	Eligibility	After	an	Enrollment	Status	Change
If	a	student	who	received	a	disbursement	of	Direct	Loan	funds	prior	to	the	first	day	of	classes	of	a	payment	period	begins
attendance	on	a	less-than-half-time	basis,	there	is	no	requirement	for	the	school	or	the	student	to	return	the	loan	funds	as
long	as:
The	student	began	attendance	in	at	least	one	course	during	the	payment	period;	and
At	the	time	of	the	loan	disbursement	the	student	was	enrolled	(registered)	for	classes	on	at	least	a	half-time	basis.
However,	the	school	must	not	make	any	subsequent	disbursements	of	the	loan	unless	the	student	resumes	enrollment	on
at	least	a	half-time	basis	during	the	payment	period.
A	student	who	is	no	longer	enrolled	at	least	half	time	may	not	receive	as	a	late	disbursement	any	second	or	subsequent
disbursement	of	the	loan.
Note	that	different	requirements	apply	if	a	student	who	received	a	Direct	Loan	disbursement	prior	to	the	first	day	of
classes	fails	to	begin	attendance	in	any	classes.	See	<When	A	Student	Fails	to	Begin	Attendance=	in	
Volume	4,	Chapter	3.
If	a	student	does	not	withdraw	but	ceases	to	be	enrolled	on	at	least	a	half-time	basis,	a	school	may	make	a	late
disbursement	of	a	Direct	Loan	for	costs	incurred	by	the	student	for	a	period	in	which	the	student	was	eligible.	However,
this	does	not	apply	if	the	student	dropped	all	future	classes	or	modules,	because	the	student	never	began	classes	as	a
half-time	student.
Title	IV	program	funds	(including	Direct	Loans)	are	disbursed	to	a	student	on	the	presumption	that	the	student	will	attend
the	hours	for	which	aid	has	been	awarded.	Therefore,	a	school	is	not	required	to	delay	the	disbursement	of	a	Direct	Loan
until	a	student	has	begun	attendance	in	enough	hours	to	establish	half-time	enrollment	status.	However,	if	a	school	has
not	yet	made	a	Direct	Loan	disbursement	to	a	student	who	has	dropped	classes,	and	the	school	determines	that	the
student	never	began	attendance	in	enough	classes	to	establish	half-time	enrollment	status,	the	school	may	not	make	a
first	disbursement	of	a	Direct	Loan	to	that	student.
Likewise,	if	a	student	who	was	enrolled	in	a	series	of	modules	drops	all	future	classes	before	beginning	attendance	in
enough	modules	to	establish	half-time	enrollment	status,	the	school	may	not	make	a	first	disbursement	of	a	Direct	Loan
because	the	student	never	began	attendance	on	at	least	a	half-time	basis.	If	a	student	who	dropped	to	less-than-half-time
status	resumes	enrollment	on	a	half-time	basis	during	the	payment	period	or	period	of	enrollment,	the	school	may	make
remaining	disbursements	of	a	Direct	Loan	if	the	school	documents	(1)	the	student9s	revised	COA,	and	(2)	that	the	student
continues	to	qualify	for	the	entire	amount	of	the	loan,	despite	any	reduction	in	the	student9s	COA	caused	by	the
temporary	cessation	of	enrollment	on	at	least	a	half-time	basis.
DCL	GEN-16-10
Late	Disbursements	for	Students	Who	Cease	To	Be	Enr olled	at	Least	Half	Time
34	CFR	668.164(j)(3)(iii)
Direct	Loan	Disbursements	to	Students	Who	Temporari ly	Cease	Half-Time	Enrollment
34	CFR	685.303(b)(3)(iv)
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