Department Sheds Light On Arbitrary Cutoff Dates For Federal Loans

Abstract:

NASFAA periodically receives inquiries asking whether there is specific regulation or Department of Education policy that addresses school-imposed cutoff dates by which borrowers must apply to receive Federal Family Education Loan (FFEL) or Direct Loan Program loans. This issue is raised periodically, generally by schools that wish to set cutoff dates either to encourage borrowers to apply early in the academic year, or because their staffing pattern makes continual loan processing administratively burdensome. According to the Department of Education, however, FFEL and Direct Loans are entitlement programs and there is no authority under which a school can generally establish deadlines for a student to request a loan.

The full article was originally published in NASFAA’s Today’s News on 10/02/07.