Minnesota Administrative Rules

4850.0015 LOAN DISBURSEMENTS.

Subpart 1.

Disbursement scheduling.

If loan proceeds are in the form of an individual check, the check must be jointly payable to the borrower and the eligible school. If the loan period covers more than one academic or payment period, the loan must be disbursed in installments during each academic or payment period. (For example, if an eligible school's academic year is divided by quarters, the student's loan amount may be disbursed in three installments, once each quarter.) Disbursements must be made at the beginning of each academic term, unless the commissioner requires or the school suggests other more appropriate dates.

Subp. 2.

Disbursement when loan proceeds arrive before loan period.

Loan proceeds must not be disbursed to the student before the start of the loan period. The school must verify the student's enrollment and that the student meets satisfactory academic progress requirements. If the loan proceeds are in the form of an individual check, the school must deliver the check to the student for endorsement. The check must then be endorsed by the school. In the case of either a check or an electronic funds transfer, the school must next subtract from the loan proceeds the amount owed to it for the payment period, and make arrangements with the student for the use of any remaining proceeds. The remaining proceeds may be returned to the student or retained on account at the election of the student. The school may not keep on account any more money than it charges for that payment period without the written permission of the student.

Subp. 3.

Disbursement when loan proceeds arrive during loan period.

When the loan proceeds arrive during the loan period, the school must verify the student's enrollment and that the student meets satisfactory academic progress requirements. If the loan proceeds are in the form of an individual check, the school shall endorse the check along with the student, subtract from the proceeds that amount owed to it for the payment period, and make arrangements with the student for the use of any remaining proceeds. The student has the same options for receiving any remaining proceeds as described in subpart 2. If the student is on a school approved leave of absence when the loan proceeds arrive and is scheduled to return within 30 days from the date on the check or the date of the electronic funds transfer, the school may hold the loan proceeds until the student returns. If the student fails to return or does not show up for disbursement, the loan proceeds must be returned to the commissioner within 30 days from the date on the check or the date of the electronic funds transfer, whichever is applicable.

Subp. 4.

Disbursement when loan proceeds arrive after loan period.

When the loan proceeds arrive after the loan period, the school must verify the student's enrollment and that the student meets satisfactory academic progress requirements. If the loan proceeds are in the form of an individual check, the school must endorse the check along with the student within 45 days from the end of the loan period, subtract from the proceeds that amount owed to it for the payment period, and make arrangements with the student for use of any remaining proceeds. The remaining proceeds must be returned to the student or retained on account at the election of the student. The school may not keep on account more money than it charges for that payment period without the written permission of the student. If the loan proceeds arrive more than 45 days after the end of the loan period, the school must return the loan proceeds to the commissioner.

Statutory Authority:

MS s 136A.01; 136A.04; 136A.111; 136A.16; 136A.1701; 136A.234

History:

10 SR 1852; 15 SR 1780; 20 SR 2214; 22 SR 1369; 35 SR 1092; L 2013 c 99 art 2 s 29

Published Electronically:

July 1, 2013