2806.04.03  NATIONAL DIRECT STUDENT LOAN (NDSL) PROGRAM

References:  34 C.F.R. 674.16; NASFAA Encyclopedia 5.6.

The disbursement office must ensure that the Promissory Notes have been 
completed and signed at the time of disbursement.  There also must be 
documentation that the borrower received preloan counseling prior to 
receiving the first loan advance.  In addition, the university should require 
the student to complete a personal information sheet at least annually.

In California, the promissory note must be cosigned if the student recipient is 
a minor under eighteen years of age.

It is recommended that the disbursement office require the student to provide 
his expected graduation or separation date and verify his address each time 
NDSL funds are advanced.

The university must divide the student's total NDSL award by the number of 
terms in the academic year and disburse it accordingly.  If the total campus-
based award is less than $301, only one advance is required.  Within the above 
general guidelines, the university may determine the frequency and timing of 
disbursement.

The student may be paid directly by check, or the student's account can be 
credited.  If the student's account is credited, the student must receive written 
documentation of that transaction.