USA Funds Online Course Can Get You Up to Speed on Handling Overawards and Overpayments

Outside agencies conducting audits, as well as U.S. Department of Education program reviewers, closely monitor overawards and overpayments of Title-IV funds. All financial-aid-office staff should recognize when overawards and overpayments occur, if they need to be resolved, and how to resolve them. USA Funds^®’ online-learning Course 216, “Overawards and Overpayments,” provides the basics about these scenarios and options for handling them.

Overawards
The Department defines an overaward as “an award of federal student aid that, in combination with the resources available to that student, exceeds the student’s financial need.” An overaward occurs when a student’s financial-aid package exceeds the student’s financial need, based on the current Cost of Attendance. The following are steps that a financial-aid administrator should take when discovering that a federal student-aid recipient has received an overaward:

If the loan has not been disbursed, the financial-aid administrator can:

• Move subsidized funds to unsubsidized funds, which can be used to replace the Expected Family Contribution.
• Request that the lender adjust subsidized/unsubsidized allocations.
• Adjust other aid.
• Increase the COA.

Once an initial disbursement is made, subsequent disbursements can be adjusted (subsidized to unsubsidized), reduced or canceled to resolve the overaward. Aid administrators also can:

• Request that the lender adjust subsidized/unsubsidized allocations.
• Adjust other aid.
• Increase the COA.

Overpayments
An overpayment, according to the Department, is “any federal student aid paid in excess of the amount the student is eligible to receive.” Generally schools can make adjustments to students’ aid to eliminate the overaward before an overpayment is created. Except in the case of Federal Work-Study funds, if the overpayment cannot be resolved by adjusting other aid, the funds must be repaid to the Department.

Students are responsible for repaying any overpayments, unless the school was at fault in awarding the aid.

If overpayments occur in any program, financial-aid administrators may adjust future financial-aid disbursements scheduled for the upcoming award year to resolve the issue. Adjustments should be made within the same program in which the overaward occurred; however, if financial-aid professionals determine that additional adjustments are necessary, they can adjust future Perkins-loan or FSEOG disbursements to resolve overpayments in either of those programs. Schools also should note that Pell-Grant overpayments are treated separately. They may not adjust a Pell Grant to try to resolve an overpayment in another program.

The online course “Overawards and Overpayments” offers additional information. The course is one of more than 60 that USA Funds University offers to help financial-aid and education-lending professionals enhance their skills. More information about the online courses and other training opportunities from USA Funds is available on the USA Funds Web site.