TITLE: OVERAWARD PROCESS FOR STAFFORD LOANS

							CAL POLY STATE UNIV                                                               SECTION:        8.2
FINANCIAL AID - 02/03                                                                PROC:        GSLOver
PROCEDURES MANUAL                                                                    DATE:        6/17/92
                                                                                      REV:        7/30/2012

                      TITLE:     OVERAWARD PROCESS FOR STAFFORD LOANS

 RESPONSIBLE PERSONS:            Counseling Staff, Loan Specialists, Student Accounts

            DISTRIBUTION:        Financial Aid Staff, Student Accounts, Academic Records


PURPOSE:
With the enactment of the Omnibus Budget Reconciliation Act of 1989, schools are required to monitor
Stafford for overawards after the applications have been certified, taking into consideration other
financial aid received by the student throughout the academic year.
      “In general, there is no overaward tolerance for these loans. However, if a student’s
      financial aid package also contains Federal Work-Study (FWS), there is a $300
      overaward tolerance for the loan overaward.” (Federal Handbook Chapter 2, page 67).
If the school determines that release of a disbursement would result in an over-award, it must return the
disbursement, or appropriate portion thereof, to the lender within 60 days.


RECEIPT OF ADDITIONAL RESOURCES:

If Stafford has been certified and additional resources are now being added to the student's award (Cal
Grants, outside scholarships, etc.):
  1) First try to rectify the overaward by increasing the budget on Screen 312, BDGT 2 Column under
     MISC to allow for any unusual or unexpected expenses that occurred during the academic year
     (September 1 - June 15). Acceptable documentation includes: photocopies of car insurance
     policy, car registration, car repairs, medical, dental, and optical receipts/bills for expenses incurred
     during the academic year and paid by the student. Instruct student to also photocopy proof of
     payment (ex: both sides of canceled checks).
  2) Counselor may check screen 409 for acceptable course and lab fees that may be included. Review
     Screen 326 to confirm exact amount of the over-award. Review for correct loan fees on Screen
     312.
  3) Review expected enrollment status. If student completed units for Summer Quarter 2002 and was
     not funded, build in cost of fees and document on Screen 348. Full time summer fees are $720
     UG $746 Grad and half time units are $520 UG and $536 Grads.

When an overaward makes it necessary to reduce or cancel the Stafford loan, we can mail - or FAX - a
FFEL Program Change Form to the lender to effect the change. The form is available in WORD, general
template ‘FFEL.dot’. If loan is still “R”, refer to Proc. 8.1 Transmission to CSAC.




3f9c84a4-1934-481f-9d9c-710e7a282317.doc          Page 1                                         7/30/2012
CAL POLY STATE UNIV                                                           SECTION:      8.2
FINANCIAL AID - 02/03                                                            PROC:      GSLOver
PROCEDURES MANUAL                                                                DATE:      6/17/92
                                                                                  REV:      7/30/2012

1.    To cancel the award - or the remaining award if a disbursement has already been made -
      complete Program Change Form, make the required change to 318 (317 if uneven disbursement),
      and note on 348.

2.    To reduce the award, complete Program Change Form letting the lender know which items to
      change on the Stafford certification. Fill in the "Change Form" totals directly from the loan
      application file (Screen 392):
                 Est. Financial Aid = FLS off, Certified Amount = Recommend FSL
      The “Change To” totals should include the new aid such as scholarship or Cal Grant. The
      “Change To” total will be the amount of Stafford the student is now eligible to receive. (Cost
      minus Aid minus EFC = Subsidized Stafford and Cost minus Aid = Unsubsidized Stafford). Use
      Remarks to request that the bank re-calculate the 2nd and 3rd disbursements in 2 equal amounts
      if the 1st disbursement has occurred. Also, if changes have been made to the Cost (loan budget)
      or the TFC, request that the bank change these sections of the application as well. Indicate any
      further clarification you deem necessary. Make the required change to 318, and note on 348.
      Send new award letter with message RG1 or other, as applicable.

3.    If loan funds are here, inform Jan Grieb, Student Accounts Office, of any adjustments that may
      occur. She will need to know of EFT loans that will be canceled after funds are here.

4.    Forward Program Change Form to appropriate financial aid advisor for imaging.




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