DISBURSEMENT RULES.

SEC. 421. DISBURSEMENT RULES. (a) Monthly or Weekly Disbursement.— Section 428G(c) of the Act (20 U.S.C. 1078–7) is amended— (1) by striking “and” at the end of paragraph (1); (2) by striking the period at the end of paragraph (2) and inserting “; and”; and (3) by adding at the end the following new paragraph: “(3) notwithstanding subsection (a)(2), may, with the permission of the borrower, be disbursed on a weekly or monthly basis, provided that the proceeds of the loan are disbursed in substantially equal weekly or monthly installments, as the case may be, over the period of enrollment for which the loan is made.”. (b) Overaward Adjustments.— Section 428G(d)(2) of the Act is amended by inserting before the period at the end of the first sentence the following: “, except that overawards permitted pursuant to section 443(b)(4) of the Act shall not be construed to be overawards for purposes of this paragraph”. (c) Sales Prior to Disbursement Prohibited.— Section 428G of the Act is amended by adding at the end thereof the following new subsection: “(g) Sales Prior to Disbursement Prohibited.— An eligible lender shall not sell or transfer a promissory note for any loan 106 STAT. 535made, insured, or guaranteed under this part until the final disbursement of such loan has been made, except that the prohibition of this subsection shall not apply if— “(1) the sale of the loan does not result in a change in the identity of the party to whom payments will be made for the loan; and “(2) the first disbursement of such loan has been made.”.