Every month, HESC’s “Question and Answer” Web feature includes an interesting question presented to the Office of Counsel and Regulatory Compliance staff.

This month’s winning question was received from a lender:

If a Stafford loan application is received from a school by the lender after the loan period has ended, even if it was certified prior to the loan period ending, must the lender or guarantor deny the application?

Federal regulations allow a lender to process and disburse a loan as long as the school certified the borrower’s eligibility by the end of the loan period or the date on which the student ceases to be enrolled at least half time, whichever is earlier. If the school does not certify the loan by the earlier of these two dates, the loan cannot be disbursed. Although the application wasn’t received during the loan period, it can still be processed and disbursed assuming the lender adheres to late disbursement requirements.

Direct questions regarding this guidance to the Office of Counsel and Regulatory Compliance at 518-473-3986, or toll-free at 1-866-431-HESC (1-866-431-4372), press 6, or via email at askpolicy@hesc.org.