Canceling a loan or a loan disbursement is a lender/servicer function that results in a reduction of a loan’s guarantee. There are a number of reasons why it may be necessary to cancel a disbursement:
- The student transfers to a new school and must have his or her loan eligibility re-determined at the new school.
- The student no longer wants the loan or disbursement.
- The loan proceeds are not negotiated within 120 days after disbursement.
- The student withdraws or is otherwise no longer eligible for the loan or disbursement.
A school must request the cancellation of a loan or disbursement with the lender. The lender will then request that ISAC cancel the loan or a disbursement. To cancel a loan or disbursement with ISAC, the lender has the following options:
- If requesting a full loan cancellation (all disbursements), the lender may submit loan cancellation information to ISAC via their Lender Manifest reporting beginning July 1, 2003.
- If the lender is participating in Common Account Maintenance (CAM) and is trading using record type 09 (decreases in loan amounts), the cancellation (full or partial) may be transmitted to ISAC via CAM (anticipated beginning 4th quarter 2003).
- Lenders may submit cancellations manually. In this instance ISAC suggests the following:
For 25 or less records, send an e-mail to qualitycontrol@isac.org listing the student’s SSN, loan type, ISAC loan ID, the disbursement(s) to be cancelled along with the amounts to be cancelled.
For more than 25 records, please mail a roster containing the information listed above to:
ISAC
Attn: Data Quality Control Dept.
1755 Lake Cook Rd.
Deerfield, IL 60015
Reloading a Guarantee
If the school discovers that a loan or disbursement was cancelled in error after the disbursement of any loan proceeds, the lender should be contacted to request the loan or disbursement be reloaded with ISAC.
A reload will not revise any of the guarantee data used for disbursement, but rather restores the guarantee data in ISAC’s guarantee system and will not generate a new notice of guarantee.
Reinstating a Guarantee
If the school discovers that a loan or disbursement was cancelled in error prior to the disbursement of any loan proceeds, the lender should be contacted to request the loan or disbursement be reinstated with ISAC.
A reinstatement will revise the original guarantee date and the disbursement dates if necessary. A reinstatement can be requested only if:
- the full loan was originally cancelled; and
- no disbursements have been made.
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