34 CFR §682.607

1. (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. (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—
      1. (i)The original lender; or
      2. (ii)A subsequent holder, if the loan has been transferred and the school knows the new holder's identity; and
   2. (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.
2. (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.
3. (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).