When a school determines your financial aid package, it must take care to not overaward, in other words, make sure that the amount of aid that is awarded does not exceed a student’s need. When such a situation arises, awards in the package, such as student loans, will be adjusted by either being cancelled or reduced, in order to eliminate the overaward.
Overaward
Overawards can occur when:
- Circumstances change after a school has determined a student’s financial aid package. For example, a student may receive a scholarship or grant from a private organization; or
- There are application errors by the student or a school’s financial aid office.
A school is required by federal regulation to correct an overaward, regardless of the reason for the overaward.
Correcting an Overaward
Before reducing a student’s need-based aid, the school should reevaluate the student’s cost of attendance (COA) to determine if the student has increased costs that the school did not anticipate when they originally awarded the aid.
If no increased need is demonstrated, and/or the student’s total aid still exceeds their need, the school must resolve the overaward. This is generally achieved by reducing and/or cancelling the financial aid that has been offered.
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References
- U.S. News and World Report: Report Reveals Student Loans, College Aid on the Rise
- Muhlenberg College Office of Financial Aid: Federal Direct Loan Disbursement Procedures
- State Fair Community College: Over Award of Financial Aid
- University of Central Florida Office of Student Financial Assistance: Federal Direct Loans - FAQ
Writer Bio
Natalie Smith is a technical writing professor specializing in medical writing localization and food writing. Her work has been published in technical journals, on several prominent cooking and nutrition websites, as well as books and conference proceedings. Smith has won two international research awards for her scholarship in intercultural medical writing, and holds a PhD in technical communication and rhetoric.