Page:United States Statutes at Large Volume 103 Part 3.djvu/47

 PUBLIC LAW 101-239—DEC. 19, 1989 103 STAT. 2115 SEC. 2004. ADDITIONAL REQUIREMENTS WITH RESPECT TO DISBURSE- MENT OF STUDENT LOANS. (a) AMENDMENT.— Part B of title IV of the Higher Education Act of 1965 is amended by inserting after section 428F (20 U.S.C. 1078-6) the following new section: "REQUIREMENTS FOR DISBURSEMENT OF STUDENT LOANS "SEC. 428G. (a) MULTIPLE DISBURSEMENT REQUIRED. — 20 USC 1078-7. "(1) Two DISBURSEMENTS REQUIRED. —The proceeds of any loan made, insured, or guaranteed under this part that is made for any period of enrollment shall be disbursed in 2 or more install- „ ments, none of which exceeds one-half of the loan. "(2) MINIMUM INTERVAL REQUIRED. —The intervgd between the first and second such installments shall be not less than one- half of such period of enrollment, except as necessary to permit the second installment to be disbursed at the beginning of the second semester, quarter, or similar division of such period of enrollment. "(b) DISBURSEMENT AND ENDORSEMENT REQUIREMENTS. — "(1) SLS LOANS TO FIRST-YEAR STUDENTS. —The first install- ment of the proceeds of any loan made under section 428A that is made to a student borrower who has not successfully com- pleted the first year of a program of undergraduate education shall not (regardless of the amount of such loan or the duration of the period of enrollment) be presented by the institution to the student for endorsement until— "(A) 30 days after the borrower begins a course of study; / and "(B) the institution certifies that the borrower continues to be enrolled and in attendance at the end of such 30-day period, and is maintaining satisfactory progress; but may be disbursed to the eligible institution prior to the end of such 30-day period. "(2) OTHER STUDENTS. —The proceeds of any loan made, in- sured, or guaranteed under this part that is made to any student other than a student described in paragraph (1) shall not be disbursed more than 30 days prior to the beginning of the period of enrollment for which the loan is made. "(c) METHOD OF MULTIPLE DISBURSEMENT. —Disbursements under subsection (a)— "(1) shall be made in accordance with a schedule provided by the institution (under section 428(a)(2)(A)(i)(ni)) that complies with the requirements of this section; and "(2) may be made directly by the lender or, in the case of a loan under sections 428 and 428A, may be disbursed pursuant to the escrow provisions of section 428(i). "(d) WITHHOLDING OF SECOND DISBURSEMENT.— "(1) WITHDRAWING STUDENTS. —A lender or escrow agent that is informed by the borrower or the institution that the borrower has ceased to be enrolled before the disbursement of the second or any succeeding installment shall withhold such disburse- ment. Any disbursement which is so withheld shall be credited to the borrower's loan and treated as a prepayment thereon. "(2) STUDENTS RECEIVING OVER-AWARDS. —I f the sum of a disbursement for any student and the other financial aid obtained by such student exceeds the amount of assistance for

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