Interim disbursements: If policy allows interim disbursements and you have no reason to believe FAFSA information is inaccurate prior to verification, you may

Interim disbursements: If policy allows interim disbursements and you have no reason to believe FAFSA information is inaccurate prior to verification, you may

• A. disburse the loan proceeds for any previously originated Direct Subsidized Loan to the applicant
• B. defer disbursement until verification is complete
• C. originate the Direct Subsidized Loan provided the institution does not disburse Direct Subsidized Loan proceeds
• D. make one disbursement from FSEOG Program funds

Answer: (C)

Interim disbursements allow a school to prepare and hold Title IV aid before verification is complete, as long as you have no reason to doubt the FAFSA data. In that situation, you may set up the Direct Subsidized Loan in the system (originate it) so it’s ready to go, but you must not actually disburse the loan funds until verification is finished. This keeps aid access timely while ensuring the information is verified before funds are released. Other options would either push disbursement before verification, which isn’t allowed when verification is still pending, or involve funds from programs or circumstances that aren’t applicable to interim disbursement rules.

Interim disbursements allow a school to prepare and hold Title IV aid before verification is complete, as long as you have no reason to doubt the FAFSA data. In that situation, you may set up the Direct Subsidized Loan in the system (originate it) so it’s ready to go, but you must not actually disburse the loan funds until verification is finished. This keeps aid access timely while ensuring the information is verified before funds are released.

Other options would either push disbursement before verification, which isn’t allowed when verification is still pending, or involve funds from programs or circumstances that aren’t applicable to interim disbursement rules.