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CFR > Title 34 - Education > SUBTITLE B—Regulations of the Offices of the Department of Education > CHAPTER VI—OFFICE OF POSTSECONDARY EDUCATION, DEPARTMENT OF EDUCATION (parts 600 to 694) > PART 668—STUDENT ASSISTANCE GENERAL PROVISIONS > SUBPART E—Verification of Student Aid Application Information (§668.51 to §668.61) > 668.61—Recovery of funds.

CFR

668.61—Recovery of funds.

(a) If an institution discovers, as a result of the verification process, that an applicant received under § 668.58(a)(2)(ii)(A) more financial aid than the applicant was eligible to receive, the institution shall eliminate the overpayment by—
(1) Adjusting subsequent financial aid payments in the award year in which the overpayment occurred; or
(2) Reimbursing the appropriate program account by—
(i) Requiring the applicant to return the overpayment to the institution if the institution cannot correct the overpayment under paragraph (a)(1) of this section; or
(ii) Making restitution from its own funds, by the earlier of the following dates, if the applicant does not return the overpayment:
(A) Sixty days after the applicant's last day of attendance.
(B) The last day of the award year in which the institution disbursed Federal Pell Grant, ACG, National SMART Grant, Federal Perkins Loan, or FSEOG funds to the applicant.
(b) (1) If the institution determines as a result of the verification process that an applicant received Stafford Loan or proceeds for an award year in excess of the student's financial need for the loan, the institution shall withhold and promptly return to the lender or escrow agent any disbursement not yet delivered to the student that exceeds the amount of assistance for which the student is eligible, taking into account other financial aid received by the student. However, instead of returning the entire undelivered disbursement, the school may choose to return promptly to the lender only the portion of the disbursement for which the student is ineligible. In either case, the institution shall provide the lender with a written statement describing the reason for the returned loan funds.
(2) If the institution determines as a result of the verification process that a student received Direct Subsidized Loan proceeds for an award year in excess of the student's need for the loan, the institution shall reduce or cancel one or more subsequent disbursements to eliminate the amount in excess of the student's need.
(Approved by the Office of Management and Budget under control number 1840-0570)

Code of Federal Regulations

(Authority: 20 U.S.C. 1094 )

Code of Federal Regulations

[56 FR 61337, Dec. 2, 1991, as amended at 57 FR 39089, Aug. 27, 1992; 59 FR 22068, Apr. 28, 1994; 59 FR 23095, May 4, 1994; 59 FR 61207, Nov. 29, 1994; 63 FR 40626, July 29, 1998; 71 FR 64419, Nov. 1, 2006]
Pt. 668, Subpt. E, Nt.

Code of Federal Regulations

Effective Date Note: At 75 FR 66954, Oct. 29, 2010, subpart E to part 668 was revised, effective July 1, 2012. For the convenience of the user, the revised text is set forth as follows:

Code of Federal Regulations

Effective Date Note: At 75 FR 66954, Oct. 29, 2010, subpart E to part 668 was revised, effective July 1, 2012. For the convenience of the user, the revised text is set forth as follows: Subpart E—Verification and Updating of Student Aid Application Information § 668.61 Recovery of funds from interim disbursements. (a) If an institution discovers, as a result of verification, that an applicant received under § 668.58(a)(2)(i)(B) more financial aid than the applicant was eligible to receive, the institution must eliminate the Federal Pell Grant, Federal Perkins Loan, or FSEOG overpayment by— (1) Adjusting subsequent disbursements in the award year in which the overpayment occurred; or (2) Reimbursing the appropriate program account by— (i) Requiring the applicant to return the overpayment to the institution if the institution cannot correct the overpayment under paragraph (a)(1) of this section; or (ii) Making restitution from its own funds, by the earlier of the following dates, if the applicant does not return the overpayment: (A) Sixty days after the applicant's last day of attendance. (B) The last day of the award year in which the institution disbursed Federal Pell Grant, Federal Perkins Loan, or FSEOG Program funds to the applicant. (b) If an institution discovers, as a result of verification, that an applicant received under § 668.58(a)(2)(ii) more financial aid than the applicant was eligible to receive, the institution must eliminate the FWS overpayment by— (1) Adjusting the applicant's other financial aid; or (2) Reimbursing the FWS program account by making restitution from its own funds, if the institution cannot correct the overpayment under paragraph (b)(1) of this section. The applicant must still be paid for all work performed under the institution's own payroll account. (c) If an institution disbursed subsidized student financial assistance to an applicant under § 668.58(a)(3) , and did not receive the valid SAR or valid ISIR reflecting corrections within the deadlines established under § 668.60 , the institution must reimburse the appropriate program account by making restitution from its own funds. The applicant must still be paid for all work performed under the institution's own payroll account. (Approved by the Office of Management and Budget under control number 1845-0041) (Authority: 20 U.S.C. 1094 )
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