Maintained for Historical Purposes

This resource is being maintained for historical purposes only and is not currently applicable.

Federal Supplemental Educational Opportunity Grant Program - Payments to Students

AwardYear: 1995-1996
EnterChapterNo: 8
EnterChapterTitle: Federal Supplemental Educational Opportunity Grant Program
SectionNumber: 2
SectionTitle: Payments to Students
PageNumbers: 7-10


MINIMUM AND MAXIMUM AWARD

[[Awards-- $100 to $4,000]]
[[FSEOG for study abroad]]
[[Final Rule 11-30-94]]
A school may award an FSEOG in an amount the school determines
a student needs to continue his or her studies for an academic year.
A student's minimum allowable award for an academic year may be
reduced proportionately if the student is enrolled less than an
academic year. An FSEOG may not be less than $100 and may not
exceed $4,000 for a full academic year unless the student has
reasonable costs of study abroad that exceed the cost of attendance at
the home school. The maximum amount of the FSEOG may be
increased from $4,000 to as much as $4,400 for a student
participating in a program of study abroad that is approved for credit
by the home school (this provision is included in Section 676.20(c)
of the November 30, 1994 Final Rule).

DISBURSEMENT

[[Method of payment]]
[[Final Rule 12-1-94]]
A school must notify a student of the amount he or she can expect to
receive, as well as how and when that amount will be paid. A school
may disburse an FSEOG directly to a student by check or may credit
the student's account. In addition, under a provision of the General
Provisions Final Rule published in the Federal Register on
December 1, 1994, effective July 1, 1995, a school may choose to
pay a student by electronic funds transfer (EFT) to the bank account
designated by the student or parent, as applicable; however, the
school must first obtain an authorization from the student or parent
to disburse by EFT. A school may not require a student to sign a
power of attorney as a prerequisite to receiving his or her FSEOG.

The school may not disburse funds for a payment period until the
student registers for that period. (Correspondence students must
submit their first completed lessons before receiving funds.) As
stated earlier, the General Provisions Final Rule published on
December 1, 1994, effective July 1, 1995, provides that the earliest a
school may PAY DIRECTLY OR CREDIT THE ACCOUNT of an
enrolled student is 10 DAYS before the first day of a payment period
or period of enrollment. A school may no longer credit the account
of an enrolled student up to 3 weeks before the first day of classes.

If a student withdraws (officially or unofficially) or is expelled
before the first day of classes, the school must return any funds to
the FSEOG account that were paid to the student.

[[Final Rule 11-30-94]]
[[Late payment conditions]]
Under certain conditions, a student who drops out before receiving
his or her Federal Perkins Loan or FSEOG can receive a payment
(see Section 676.16(f) of the November 30, 1994 Final Rule). The
school may disburse FSEOG funds to the student only if--

- the FSEOG is awarded to the student while he or she is still an
eligible student; and

- the FSEOG funds are used to cover documented educational
costs that were incurred for a payment period for which the
award was intended and during which the student was actually
enrolled; costs that may be included are those normally
included in a student's cost of attendance under section 472 of
the HEA (discussed in Chapter Two).

A school that disburses FSEOG funds to a student after he or she
has dropped out must document in the student's file the reason for
the late disbursement.

If a student drops out AFTER receiving his or her FSEOG, but
before the end of the payment period, the school determines the
amount of any refund and repayment as discussed in Chapter Three,
Section Four.

FREQUENCY OF DISBURSEMENTS

[[Standard term schools-- once a payment period]]
If a school is awarding an FSEOG for a full academic year and the
school uses standard academic terms, it must advance a portion of
the grant during each payment period. (Generally, the total FSEOG
award is divided by the number of payment periods the student will
attend.) In schools with a traditional academic year, payment
periods are usually defined as semesters, trimesters, or quarters.

[[Non-standard term schools-- twice in school year]]
If the school does not use standard academic terms, it must advance
funds at least twice during the academic year--once at the
beginning and once at the midpoint. Normally, no more than half
the award may be advanced before the midpoint. If the student
attends less than an academic year, the award is divided by the
number of payment periods the student will attend during the
academic year. A school may advance funds WITHIN a payment
period in whatever installments it determines will best meet the
student's needs. However, if the total amount awarded a student
under the FSEOG Program is less than $501 for an academic year,
only one payment is necessary.

UNEQUAL DISBURSEMENTS

As is true for the Federal Perkins Loan Program, if the student
incurs uneven costs or receives uneven resources during the year and
needs extra funds in a particular payment period, a school may make
unequal FSEOG disbursements. For a discussion of uneven costs
and unequal disbursements, see Chapter Six, Section Two.

FSEOG OVERPAYMENTS AND OVERPAYMENTS

[[School must take resources into account]]
As discussed in Chapter Five, a financial aid administrator may not
award or disburse an FSEOG to a student if the grant, when
combined with all other resources, would exceed the student's need.
The aid administrator must take into account those resources that he
or she can reasonably anticipate at the time aid is awarded to the
student, those the school makes available to its students, or those the
aid administrator knows about.

If an FSEOG recipient receives total resources that exceed the
student's financial need for campus-based aid by more than $300,
the amount over $300 is an overpayment. A list of resources and a
discussion of overawards and overpayments are included in Chapter
Five, Section Two: Resources and Overawards. A student is liable
for any FSEOG overpayment made to him or her.

The school is also liable for an overpayment if the overpayment
occurred because the school failed to follow the procedures outlined
in Chapter Five, Section Three. The school must restore an amount
equal to the overpayment and any administrative cost allowance
claimed on that amount to its FSEOG account even if it cannot
collect the overpayment from the student.

[[Notify ED of unrecovered overpayment of $25 or more]]
If the school makes an FSEOG overpayment that is not the result of
institutional error, the school must promptly try to recover the
overpayment by sending a written notice to the student requesting
payment in full. A student who fails to repay overawarded FSEOG
funds (even if the student owes less than $25) is ineligible for
further SFA funds until the overpayment is resolved.

If a student objects that the school has made a mistake in
determining the overpayment, the school must consider any
information provided by the student and determine whether the
objection is warranted before referring the overpayment to ED. If the
school fails to collect the overpayment after taking these steps, AND
if the federal share of the overpayment is $25 OR MORE, the school
must notify ED of the overpayment, identifying the federal share of
the overpayment, as well as the student's name, most recent address,
telephone number, and other relevant information. After providing
this information to ED, the school is not required to make any
further attempt to collect the overpayment. If the school is unable to
collect the overpayment AND the federal share is LESS THAN $25,
the school is not required to make any further attempt to collect the
overpayment.