Federal Direct Loan Disbursement Procedures

After loan approval, the Federal Direct Student and/or  Parent loan funds will be available for disbursement, no earlier than 10 days before the start of the term. Funds will be released only after enrollment and Satisfactory Academic Progress have been verified.

These funds are normally payable in two disbursements, one-half of the total loan amount for each semester. Single semester loans will be disbursed in one disbursement. 

Disclosure statements regarding loan amounts, deducted fees, and funds transferred will be sent to student or parent borrower by the Department of Education via e-mail and snail mail.

Funds for Federal Direct Loans will be electronically transferred to your student account within 3 business days of receipt from the Federal Government, or they will be returned.  Muhlenberg College’s Controller’s Office mails a notification to the student's permanent mailing address when funds are credited to their account indicating the type of loan and amounts for each and that the student or parent borrower may cancel the loan within 14 days of receiving the notification letter. 

If an overpayment of your account is created by the crediting of the Federal Direct Loan, the credit balance will be returned to the borrower (to student for a Federal Direct Student Loan or to the parent borrower for a Federal Direct Parent Loan).

Loan Cancellation

You have the right to cancel all or part of your federal loan disbursement for each semester.

The first way to do this is when you are reviewing your financial aid award on the Financial Aid Online system.  There you may accept, reduce, or decline the student loan(s).

The second way is when you are completing the Federal Loan Request Form.  There again, you may decline the award, or you may reduce the amount you wish to take on the lines where you indicate your loan amounts requested.

Finally, if you have completed everything required for your Federal Loan to be processed, and the loan was disbursed and deducted from your student invoice, if you wish to cancel the loan, you must submit a written request to the Office of Financial Aid within 14 days from the date you receive official notification from our Controller’s Office that loan funds have credited to your account, or before the first day of classes, whichever occurs last.

Your written request to cancel a may be submitted by e-mail from your e-mail account on file or as a handwritten, typed, or printed statement bearing an original signature submitted by mail, in person, or by fax. To cancel a Federal parent PLUS loan, the parent borrower may submit a handwritten, typed, or printed statement bearing an original signature by mail, in person, or by fax or from their e-mail address on file.

No interest will be charged and loan fees will be returned to the loan holder.

Cancelling your loan disbursement could cause a balance to be due which you will be responsible for paying. This is especially true if you have received a bookstore voucher or a refund due to excess funds (credit balance) on your account.

Repayment AFTER the Designated Time Period:

You cannot cancel your loan disbursement if the designated time period described above has already passed. Instead, you can repay the loan disbursement directly by contacting the loan holder (Direct Loan Servicer for Federal Direct Loans; the Controller’s Office for Federal Perkins Loan). The borrower (you for student loans; the parent borrower for parent loans) will be responsible for any interest that may have accrued and/or any loan fees.

Cancelling Future Loan Disbursements:

You (the borrower) must submit in writing your request to cancel future loan disbursements by contacting the Office of Financial Aid  prior to 10 days before the start of classes for the next term(s). Once the loan has been disbursed for the next term(s), then you must follow the procedures described above.