34 C.F.R. § 682.607

Payment of a refund or a return of title IV, HEA program funds to a lender upon a student's withdrawal

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(a) General. By applying for a FFEL loan, a borrower authorizes the school to pay directly to the lender that portion of a refund or return of title IV, HEA program funds from the school that is allocable to the loan upon the borrower's withdrawal. A school—

(1) Must pay that portion of the student's refund or return of title IV, HEA program funds that is allocable to a FFEL loan to—

(i) The original lender; or

(ii) A subsequent holder, if the loan has been transferred and the school knows the new holder's identity; and

(2) Must provide simultaneous written notice to the borrower if the school makes a payment of a refund or a return of title IV, HEA program funds to a lender on behalf of that student.

(b) Allocation of a refund or returned title IV, HEA program funds. In determining the portion of a refund or the return of title IV, HEA program funds upon a student's withdrawal for an academic period that is allocable to a FFEL loan received by the borrower for that academic period, the school must follow the procedures established in part 668 for allocating a refund or return of title IV, HEA program funds.

(c) Timely payment. A school must pay a refund or a return of title IV, HEA program funds that is due in accordance with the timeframe in § 668.22(j).

(Authority: 20 U.S.C. 1077, 1078, 1078-1, 1078-2, 1082, 1094) [64 FR 59043, Nov. 1, 1999]

Notes of Decisions

Cited in 6 cases, 1991–2018 · leading case: United States v. Elizabeth Kammer, 1 F.3d 1161 (11th Cir. 1993).

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United States v. Elizabeth Kammer, 1 F.3d 1161 (11th Cir. 1993). · cites it 2× “According to the regulations, if students who received these loans withdrew prior to completing the course, the unearned portions of the loans had to be refunded to the lender within sixty days, pursuant to 34 C.F.R. § 682.607 (c). 3 *1163 During the spring of 1989, Rammer…”

Eisenberg v. Pennsylvania State Univ. (In re Lewis), 574 B.R. 536 (Bankr. E.D. Pa. 2017). “§§ 5104, 5105, While this statement is generally true, the Trustee is grasping at straws, First, the Bankruptcy Code and PUFTA do not provide authority for the Trustee to obtain the relief he seeks, which is for the Parent Plus loan proceeds to be paid to him by Penn State.”

Novak v. Univ. of Miami (In re Demitrus), 586 B.R. 88 (Bankr. D. Conn. 2018). “See 34 C.F.R. § 682.607 . The HEA permits the DOE to take enforcement action seeking criminal penalties against any person who obtains PLUS loan funds by fraud or who misapplies such funds.”

Oliver Schs., Inc. v. Foley, 930 F.2d 248 (2d Cir. 1991). “See 34 C.F.R. § 682.607 ; 8 N.Y.C.R.R. § 2105.”

People v. Oliver Schs., Inc., 206 A.D.2d 143 (N.Y. App. Div. 1994). “Under Federal and State regulations governing the GSL program in New York, if a student who has obtained a GSL withdraws from school, the school is required to refund a portion of the loan to the lending institution (34 CFR 682.607 [c] [2]; 8 NYCRR 2105.2). The refund payments…”

Oliver Schs., Inc. v. Foley, 881 F. Supp. 847 (W.D.N.Y. 1994). · cites it 2× “' 34 C.F.R. § 682.607 (e)(1). If, after a student withdrew, OSI failed to refund the loan balance to a lender and the student was not *851 forgiven the refund amount, the student remained liable for the full amount of the loan, plus interest.”

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