34 CFR 682.607 : Education (Parts 1-2 To Parts 1201-1299) — (Parts 680-681 To Parts 1201-1299) — Regulations Of The Offices Of The Department Of Education (Continued) (Parts 680-681 To Parts 700-799) — Office Of Postsecondary Education, Department Of Education (Continued) (Parts 680-681 To Parts 695-699) — Federal Family Education Loan (Ffel) Program (§ 682.100 To Appendix D To Part 682) — Requirements, Standards, And Payments For Schools That Participated In The Ffel Program (§§ 682.600-682.602 To § 682.611) — Payment of a refund or a return of title IV, HEA program funds to a lender upon a student's withdrawal.

(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).