Regardless	of	the	length	of	the	loan	period,	you	may	disburse	a	Direct	Loan	in	a	single	installment	if	the	loan	is	to	cover	a
student's	COA	in	a	study	abroad	program	and	your	school9s	calculated	cohort	default	rate	is	less	than	5%	for	the	most
recent	fiscal	year	for	which	data	are	available.
Direct	Loan	Disbursements	for	Completed	Payment	Periods
The	Direct	Loan	Program	regulations	allow	a	school	to	include	in	a	single	disbursement	the	disbursements	for	any
payment	periods	that	have	ended.	However,	the	COD	System	(except	for	schools	exempted	because	of	low	default	rates)
requires	schools	to	enter	at	least	two	anticipated	disbursement	dates.	Therefore,	when	creating	a	loan	origination	record
for	a	Direct	Loan	when	you	intend	to	include	in	a	disbursement	loan	proceeds	for	any	payment	periods	that	have	been
completed,	you	should	enter	the	actual	date	you	anticipate	making	the	disbursement	as	the	anticipated	date	for	all
disbursements	that	would	be	included.	For	example,	consider	a	school	attempting	to	submit	an	origination	when	the	data
is	as	follows:
Loan	period:	09/01	-	05/30	(fall	through	spring)
Minimum	number	of	disbursements	normally	required:	2
Payment	period	1:	09/01	-	12/20
Payment	period	2:	01/06	-	05/30
Date	school	creates	origination	record:	01/09
If	you	anticipate	disbursing	the	loan	proceeds	for	both	payment	periods	on	January	16,	you	should	enter	January	16	as	the
date	for	both	the	first	and	second	disbursements	when	you	create	the	origination	record.
Direct	Loan	Disbursements	Made	After	the	Date	of	the	Borrower9s	Death
If	a	school	learns	that	a	student	or	parent	Direct	Loan	borrower	has	died	before	one	or	more	disbursements	of	a	loan	have
been	made,	the	school	must	cancel	all	pending	disbursements.	Direct	Loan	funds	cannot	be	disbursed	when	there	is	no
possibility	of	repayment.	In	addition,	if	a	school	is	not	informed	of	a	student	or	parent	borrower9s	death	until	after	one	or
more	loan	disbursements	have	been	made,	the	school	must	return	to	the	Department	the	full	amount	of	all	loan	funds
that	were	credited	to	the	student9s	school	account	after	the	date	of	the	borrower9s	death	(if	the	post-death	disbursement
created	a	credit	balance	that	was	paid	directly	to	the	student	or	parent,	the	school	is	not	responsible	for	returning	the
credit	balance	amount).
Disbursements	after	the	date	of	the	borrower9s	death	are	most	likely	to	occur	when	a	parent	Direct	PLUS	Loan	borrower
dies.	If	an	enrolled	student	dies,	the	school	will	generally	learn	of	the	death	in	a	timely	manner	and	can	cancel	any
pending	loan	disbursements.	However,	if	a	parent	Direct	PLUS	Loan	borrower	dies,	the	student	or	other	family	members
Study	Abroad	Program	Exception
34	CFR	685.303(d)(6)(i)(B)
Direct	Loan	Disbursement	After	One	or	More	Payment	 Periods	Have	Elapsed
34	CFR	685.303(d)(4)(i)
{"producer": "GPL Ghostscript 10.00.0", "creator": "wkhtmltopdf 0.12.6", "creationdate": "D:20250605165703Z00'00'", "moddate": "D:20250605165703Z00'00'", "source": "data/raw/The_Direct_Loan_Program.pdf", "total_pages": 71, "page": 27, "page_label": "28", "loader_type": "pdf", "load_timestamp": "2025-07-05T11:43:14.400025"}