Latin Beauty Academy defines disbursement, according to the Department of Education as the payment of federal student aid funds to the borrower by the school. Students generally receive their federal student loan in two or more disbursements.
Summary of Recent Changes to FSA Disbursement Requirements
Latin Beauty Academy understands that the Cash Management Regulations specify that our institution must disburse all Title IV grant and loan funds on a payment period basis and FSA funds are disbursed using the payment period definitions in 34 CFR 668.4. Latin Beauty Academy has more than two payment periods. Our institution has implemented procedures on disbursing and awarding Title IV to ensure a correct performance of the Financial Aid Department.
Notification of Disbursement
Financial Aid Department has implemented two types of notifications to inform the disbarment: (1) a general notification to all students receiving Title IV aid; and (2) a notice when loan funds are credited to a student’s account.
Latin Beauty Academy notifies to the student and/or his/her parents about the amount of funds assigned and they can expect to receive from each FSA program. The institution does this process through the aware letter, including FWS, and how and when those funds will be disbursed. The Financial Aid Department makes the notification before the disbursement is made. If the funds include a Stafford Loan (whether Direct Loan or FFEL), the institution indicates which funds are from subsidized loans and which are from unsubsidized loans. During this process, it is the main objective for the institution provides the best information that it has regarding the amount of FSA program funds a student can expect to receive as the actual loan disbursements received by a student may differ slightly from the amount expected by the school (due to loan fees and rounding differences). Latin Beauty Academy includes the gross amount of the loan disbursement or a close approximation of the net disbursement amount.
Latin Beauty Academy notifies when Perkins, Stafford or PLUS loan funds are being credited to a student’s account, except in the case of loan funds made as part of a post-withdrawal disbursement. The Financial Aid Department notifies the student or parent in writing (electronically) of the anticipated date and amount of the disbursement. Student’s (or parent’s) right to cancel all or part of the loan or disbursement (not required if issuing a paper check under the FFEL program).
Method of Disbursement
Latin Beauty Academy uses two ways to disburse FSA funds: 1) by crediting the student’s account for allowable charges at the school, or 2) by paying the student or parent directly. Credit to the student’s account when the school disburses FSA program funds to the student by crediting the student’s account, it may do so only for allowable charges.
Allowable Charges Include:
- Current charges for tuition and fees; and
- Other current charges that the student has incurred for educationally-related activities if you obtain the student’s written authorization or the parent’s written authorization – in the case of PLUS loan funds).
Direct Disbursement to the Student
Latin Beauty Academy disburses FSA funds directly to the student or parent. Department of Financial Aid has implemented that the first credit FSA funds to the student’s account at the school, and then disburse the credit balance to the student or parent. There are three ways that Latin Beauty Academy may disburse FSA funds directly to the student or parent:
- Issuing a check or other instrument payable to and requiring the endorsement or certification of the student or parent (a check is issued if the school releases or mails the check to a student or parent, or notifies the student or parent that the check is available for immediate pickup).
- Disbursing to the student in cash, provided that your school obtains a signed receipt from the student or parent, or Releasing a FFEL check sent by a lender. A school may receive a borrower’s Stafford Loan funds from a lender in the form of an individual bank check made payable to the borrower or co-payable to the borrower and the school.
- In the case of a co-payable check, the school and the borrower must endorse the check. Co-payable PLUS Loan checks must be sent directly to a school by a lender. A school must disburse PLUS proceeds to a parent borrower within 30 days of receiving a check. However, a school is not required to endorse a PLUS check before sending it to a parent borrower. The school may require the parent borrower to endorse the check and return it to the school for the school’s endorsement. The school then endorses the check, deposits it and disburses the funds.
*These rules apply to the FWS program as well.
Latin Beauty Academy has defined the date of disbursement as several regulatory requirements are based on that date. For instance, the institution must disburse a FSA credit balance to a student within 14 days of the date it was created or within 14 days of the first day of class, and must notify the student of a loan disbursement within a time frame related to the date of that disbursement.
Latin Beauty Academy has established that the date of disbursement also determines when the student becomes an FSA recipient and has the rights and responsibilities of an FSA recipient. It means that when FSA loan funds are disbursed to a recipient, the student or parent assumes responsibility for the loan and has the right to cancel the loan. A disbursement occurs when our school credits a student’s account or pays a student or parent directly with: FSA program funds received from the Department.
Latin Beauty Academy has defined that when using school funds in place of FSA funds, there are two situations where the FSA disbursement is considered to have taken place on the earliest day that the student could have received FSA funds rather than the actual disbursement date: FSA program funds received from an FFEL lender, or School funds labeled as FSA program funds in advance of receiving actual FSA program funds (except as noted below).
If Latin Beauty Academy credits a student’s account with its own funds earlier than 10 days before the first day of classes of a payment period, that credit is not considered an FSA disbursement until the 10th day before the first day of classes (the earliest a school may disburse FSA funds).
If a Stafford borrower is subject to the 30-day disbursement delay and a school credits the student’s account with its own funds before the 30 days have elapsed, this is not counted as an FSA loan disbursement until the 30th day after the beginning of the payment period.
Latin Beauty Academy has established that if the institution makes a memo entry for billing purposes or credits a student’s account and does not identify it as an FSA credit (for example, an estimated Federal Pell Grant), it is not a disbursement. Latin Beauty Academy has right to prepare billing statements or invoices showing the estimated amount of FSA funds that students are eligible to receive; however, these estimated amounts are not FSA disbursements.
Checking Eligibility at the Time of Disbursement
Latin Beauty Academy before award funds to a student; the institution confirms that he or she was an eligible student for Title IV and/or he/she was making satisfactory academic progress. However, before disbursing FSA funds, Latin Beauty Academy determines and documents that the student remains eligible to receive them. That is, our Department of Financial Aid must confirm that: the student is enrolled for classes for the period and the student enrolled has completed the previous period or clock hours and weeks of instruction. If the disbursement occurs on or after the first day of classes, that the student has begun attendance; for FFEL an DL loans, the student is enrolled at least half time; for all ACG Grants, the student is enrolled full time; for second year ACG Grants, at the end of the first academic year, the student has at least a 3.0 cumulative GPA on a 4.0 scale; and for National SMART Grants, the student – is enrolled full time; has at least a 3.0 cumulative GPA on a 4.0 scale, and is enrolled and taking at least one course in an eligible major.
If a student ineligible for a Stafford or PLUS disbursement is if the student has dropped below half time, so it is important that your office have a system to check the student’s enrollment status at the time of disbursement. If the student has dropped below half time temporarily, you may still make a Stafford or PLUS disbursement after the student resumes at least half time enrollment.
FFEL/DL Disbursements within a Single Term/Payment Period
Latin Beauty Academy makes two disbursements of a FFEL or Direct Loan that is certified for a single term or a single payment period; unless it qualifies for the special rule based on low cohort default rates.
- First disbarment for instructional time in length, for a remainder of a program equal to or less than ½ an academic year;
- The second disbursement may not be paid until the student successfully completes ½ of the weeks of instructional time in the payment period; and ½ of the clock or credit hours in the payment period.
Latin Beauty Academy uses Formula 3 to calculate a Pell Grant, ACG, or National SMART Grant Pell/ACG/National SMART, which makes that the disbursements within a single term. Based on this explanation, the student’s total payment for a payment period may exceed 50% of the student’s annual award. However, the disbursements of the student’s Pell Grant, ACG, or National SMART Grant in the payment period cannot exceed 50% of the student’s annual award until the student completes in the payment period at least ½ the weeks of instructional time in the academic year.
Timing of Disbursements
Latin Beauty Academy considers that the timing of disbursements is especially important for Pell, ACG, and National SMART Grant and Stafford/PLUS loan funds, because our institution must schedule disbursement dates with the Department and/or private lenders.
Basic Rules for Early and Delayed Disbursements
The earliest that Latin Beauty Academy may disburse FSA funds by crediting the student’s account or by paying directly to the student or parent is 10 days before the first day of classes for that payment period or the date the student completed the previous payment period for which he or she received FSA funds. This limitation is also applicable to FFEL and DL disbursements in credit-hour programs with non-standard terms that are not substantially equal in length.
Latin Beauty Academy specify that other restrictions apply. For example, if a student is in the first year of the program and is a first-time Stafford borrower, Latin Beauty Academy may not disburse the first installment of the Stafford loan until 30 calendar days after the student’s program of study begins. A student can receive the first disbursement of FSA grant or Perkins loan funds when the student begins the program or academic year. The student becomes eligible to receive a disbursement of FSA grant funds for the second payment period when the student successfully completes half the weeks of instructional time AND half the clock hours in the academic year or program or the remaining portion of a program that is more than one-half of an academic year but less than a full academic year.
As our institution uses Formula 3 to calculate a Pell Grant, ACG, or National SMART Grant, the student’s total payment for a payment period may exceed 50% of the student’s annual award. However, the disbursements of the student’s Pell Grant, ACG, or National SMART Grant in the payment period cannot exceed 50% of the student’s annual award until the student completes in the payment period at least ½ the weeks of instructional time in the academic year. Therefore, Latin Beauty Academy make at least two disbursements to the student in the payment period if it wishes to make an initial disbursement at the beginning of the payment period.
Disbursing FSEOG & Perkins
Latin Beauty Academy is awarding an FSEOG or a Perkins Loan for a full academic year, which must advance a portion of the grant or loan during each payment period. In general, to determine the amount of each disbursement, Latin Beauty Academy divide this award amount by the number of payment periods the student will attend. However, if the student incurs uneven costs or receives uneven resource during the year and needs extra funds in a particular payment period, your school may advance the additional FSEOG or Perkins amounts to the student in whatever manner best meets the student’s needs.
Retroactive Disbursements for Completed Periods
Latin Beauty Academy pays a student retroactively for any completed payment periods within the award year if the student was eligible for payment in those periods. If our institution is paying a Pell grant for a completed term in which no Pell disbursement has been made, the Pell grant must be based on the hours completed by the student for that term. If the student had enrolled full time at the beginning of the fall term but dropped to half-time status by the end of the term, the retroactive disbursement must be based on half time status. At a term school, all completed coursework counts towards enrollment status, including earned F’s and incompletes that have not converted to “F” grades because the student failed to complete the course work. (This Pell requirement does not apply to any other FSA program.)
Latin Beauty Academy to include an earlier period of eligibility when certifying a Stafford Loan, the student would have had to complete at least a half-time course load in that period. In the case of loans disbursed on a payment period basis, if a student attended the previous payment period but did not maintain eligibility for a Stafford loan, Latin Beauty Academy may not include the previous payment period or its costs in the loan period. In addition, the institution can make any retroactive disbursements in one lump sum.
Prompt Disbursement Rules
Latin Beauty Academy is receiving federal cash from the Department through one of the heightened cash monitoring payment methods, which must make disbursements as soon as administratively feasible but no later than 3 business days after receiving funds from the Department. The disbursements may be credited to the student’s account or made directly to the student or parent, as discussed earlier. These timeframes for disbursing to the student’s account (or directly to the student/parent) are different than those for paying FSA credit balances to the student or parent as Latin Beauty Academy generally has 14 days to pay an FSA credit balance to the student or parent, unless it has written permission to hold the credit balance.
Disbursing FWS Wages
Latin Beauty Academy uses as weekly payroll period monthly. LBA pays the nonfederal share to the student at the same time pay the federal share. FWS wages are earned when the student performs the work. Latin Beauty Academy pays the student after the last day of attendance for FWS wages earned while he or she was still in school. However, when a student has withdrawn from school and is not planning to return, FWS funds are used to pay for work performed after the student withdrew. A correspondence student is submitted the first completed lesson before receiving a disbursement under the FWS Program.
Crossover Payment Periods
Latin Beauty Academy based on the definition of Crossover Payment Periods, which is when a payment period is in two award years (that is, when it begins before and ends after July 1), the student is paid for compensation earned through June 30 with funds allocated for the first award year and for compensation earned beginning July 1 with funds allocated for the following award year. Disbursing to students from the correct award year is important; for this reason, Latin Beauty Academy held liable when students were paid from the wrong FWS authorization. Latin Beauty Academy keeps documentation (e.g., canceled checks, bank statements) showing that students received disbursements in the amount charged to the FWS Program.
Holding FWS Funds on Behalf of the Student
Latin Beauty Academy using a written authorization from a student hold, on behalf of the student, FWS funds that would otherwise be paid directly to the student; which it is not prohibited by the terms of a reimbursement payment method. The student’s signed document is identified with the amount of FWS funds held for the student in a designated subsidiary ledger account, maintain cash in its bank account that is always at a minimum equal to the FWS funds being held for students, and disburse any remaining balance by the end of the school’s final FWS payroll period for the award period.
Completion of Coursework
Requirements Pell Grants
Latin Beauty Academy disburses a Federal Pell Grant to an eligible student, who is enrolled and only after it determines that the student has successfully completed the credits or clock hours and weeks of instructional time in the prior payment period as defined in Volume 3, chapter 1 for which he or she has been paid a Federal Pell Grant.
Stafford and PLUS Loans in Clock-Hour Programs
Latin Beauty Academy measures academic progress in clock hours, so the institution does not deliver the second half of the loan proceeds until the student completes each academic period based SAP (actual time), Latin Beauty Academy delivers loan proceeds in substantially equal installments, and no installment may exceed one-half of the loan.
Latin Beauty Academy counts a limited number of excused absences when deciding whether the student has completed the hours in a payment period. Latin Beauty Academy has established that an excused absence is only be counted if the student is excused from hours that were actually scheduled; however even the clock hours were missed, the students must make up to receive the diploma for the program.
For instance, a student in the Cosmetology program that has 450-clock-hour payment periods might miss 20 clock hours and only have attended 430 clock hours at the point where 450 clock hours of instruction had been given. As Latin Beauty Academy has an excused absences policy, and the hours missed are considered excused, the student could be paid the next disbursement. To be counted for FSA purposes, excused absences are permitted in the school’s written policies. Under FSA regulations, no more than 10% of the clock hours in a payment period may be considered excused absences. If your school’s accrediting agency or the state agency that legally authorizes your school to operate allows fewer hours to be counted as excused absences, you must follow the stricter standard rather than the FSA standard.
Withdrawal and Reentry within 180 Days
Latin Beauty Academy has established that when a student withdraws from the program during a payment period or period of enrollment and then reenters the same program within 180 days, the student is put back into the same payment period, and any FSA funds that the school or student returned to FSA are repaid to the student. A student who ceases attendance but returns within 180 days may not be paid for repeating coursework.
Withdrawal and Reentry After 180 Days
Latin Beauty Academy has established that a student who withdraws from the program and then reenters the same program after 180 days is treated in the same manner as a student who transfers into the program from another school; i.e., the student immediately begins a new payment period or period of enrollment. In this circumstance, the student may be paid for repeating coursework if the student is receiving credit for the repeating the course. Take, for example, a student who withdraws after completing 302 clock hours of a 900-clock-hour program, so there are 148 hours in the payment period that the student did not complete. The student reenrolls after 180 days in the same program and receives credit for 100 hours. The program length for purposes of determining the new payment periods and period of enrollment is 800 clock hours (the remainder of the student’s program), so the new payment periods are 400 hours and 400 hours. The FSA payments would be for 400 hours for both payment periods, not limited to 148 hours for a payment period. If the student in this example received no credit for previously completed hours, the student’s program length for purposes of determining the payment periods would be 900 clock hours.
Repeating After Program Completion
Any student who completes an entire program, and later reenrolls to take that same program again or to take another program may be paid for repeating coursework regardless of the amount of time between completion of the first program and beginning the program or another program again.
Generally, an otherwise eligible student or parent becomes ineligible to receive FSA funds on the date that the student: for a loan made under the FFEL or Direct Loan program, is no longer enrolled at least half time; or for purposes of the Pell Grant, ACG and National SMART Grant, FSEOG, and Perkins Loan programs, the student is no longer enrolled at the school for the award year. However, if certain conditions are met, students must be considered for a disbursement after the date they became ineligible. These disbursements are called “late disbursements.”
Conditions for a Late Disbursement
Latin Beauty Academy considers a student must be considered for a late disbursement as long as the Department has processed a SAR/ISIR with an official EFC before the student became ineligible. Therefore, Latin Beauty Academy reviews its records to see if a student who did not receive a disbursement of FSA funds before becoming ineligible is eligible for a late disbursement. The procedure consists in revise information of the student ISIR record as it includes the date the Department processed the application and created the SAR/ISIR. In addition, for an FFEL or Direct Loan program loan, the loan must be certified or originated, as applicable, prior to the date the student became ineligible. Similarly, for an FSEOG or a Federal Perkins. Loan, the school must have made the award to the student prior to the date the student became ineligible.
If a student who qualifies for a late disbursement completes the payment period or period of enrollment, or withdraws during the payment period or period of enrollment; Latin Beauty Academy offers as appropriate, the late disbursement. A late disbursement for a student who has withdrawn during the payment period or period of enrollment is called a Post-withdrawal disbursement. If a student did not withdraw or complete the payment period or period of enrollment but ceased to be enrolled as at least a half-time student, Latin Beauty Academy may make a late disbursement of a loan under the FFEL or Direct Loan programs.
A student who withdraws and subsequently signs a promissory note in time for Latin Beauty Academy to include the loan funds in the Return of Title IV Aid calculation receive a late (post withdrawal) disbursement of the applicable amount of his or her loan funds. In addition, a student who loses eligibility for a reason other than his or her withdrawal and subsequently signs a promissory note may receive a late disbursement of the applicable amount of his or her loan funds. If a student’s enrollment status for an ACG or National SMART Grant was full-time on the date the student ceased to be enrolled, the school may make a late disbursement.
Limitations on Making a Late Disbursement
Based on regulations, Latin Beauty Academy is prohibited from making a late disbursement in certain situations, even if a student otherwise meets the conditions for a late disbursement.
- A late second or subsequent disbursement of FFEL or Direct Loan funds unless the student has graduated or successfully completed the loan period (34 CFR 668.164(g)(4)(ii));
- A late disbursement of FFEL or Direct Loan funds to a first year, first-time borrower who withdraws before the 30th day of the student’s program of study (34 CFR 668.164(g)(4)(iii)) (unless the school meets the requirements for a waiver in 34 CFR 6882.604(c) (5) and 34 CFR 685.303(b)(4));
- A late disbursement of Federal Pell Grant, ACG or National SMART Grant funds to a student for whom the school did not have a valid SAR/ISIR by the deadline established by ED.
- A late disbursement of an ACG or National SMART Grant if a student’s enrollment status for an ACG or National SMART Grant was not full-time on the date the student ceased to be enrolled.
In addition, Latin Beauty Academy does not make a late disbursement later than 180 days after the date the student becomes ineligible. (Note that for an FFEL that was certified prior to the student becoming ineligible, the funds would have to be disbursed to the school by the lender in sufficient time for the school to deliver the funds to the student within 180 days of the date the student became ineligible.)
Paying a Late Disbursement
If a student has completed the payment period or period of enrollment; Latin Beauty Academy pay or offer the late disbursement to the student or parent. For a post-withdrawal disbursement to a student who withdrew during a payment period or period of enrollment; Latin Beauty Academy follows the rules for paying and/or offering a Post-withdrawal disbursement in regulations governing the Return of Title IV Funds. Latin Beauty Academy makes a late disbursement of an FFEL or Direct Loan to a student who ceases to be enrolled as at least a half-time student, for this case the school determines the amount of the late disbursement of the FFEL or Direct Loan it will offer the student by determining the educational costs the student incurred for the period of instruction during which the student was enrolled at least half time.
Latin Beauty Academy contact a student prior to making ANY late disbursement of Title IV loan funds, and explain to the student his or her obligation to repay the loan funds if they are disbursed. The information provided in this notification must include the information necessary for the student or parent to make an informed decision about whether the student or parent would like to accept any disbursement of the loan funds. In addition, Latin Beauty Academy confirms that the loan funds are still needed by the student, and that the student wishes the school to make the disbursement.
Latin Beauty Academy credits a student’s account with a late disbursement of Title IV grant funds without the student’s permission for current charges for tuition, and other fees up to the amount of outstanding charges. Our institution obtains a student’s authorization to credit a student’s account with Title IV grant funds for charges other than current charges.
If a student due a late disbursement of Title IV grant funds has no outstanding charges on his or her account, or if grant funds remain to be disbursed from a late disbursement after the outstanding charges on the student’s account have been satisfied, Latin Beauty Academy pays the grant funds directly to the student within 14 days. If a student due a late disbursement of Title IV funds has a credit balance composed of FSA loan funds, our institution offers the funds in writing to the student, and may not disburse the funds directly to the student without first having obtained the student’s authorization.