AwardYear: 1995-1996 ChapterNumber: 5 ChapterTitle: Overpayments, Referrals, and Suspected Fraud Section: Referral of Overpayment Cases PageNumber: If during the verification process you discover overpayment situations, you should make every reasonable effort to collect the overpayment. (In the case of an FSEOG overpayment for which the school is not liable, you must promptly attempt to recover the overpayment by sending a written notice requesting payment in full to the student.) If, however, you are unable to collect Federal Pell or FSEOG overpayments (not the result of institutional error), you may refer the overpayment case to ED. (If you choose not to refer a Federal Pell or FSEOG overpayment case to ED, you are liable for the overpayment and must repay the appropriate program funds from school funds.) Before referring a case to ED, you should be certain that the case warrants collection action. For instance, if a student claims that a school's FSEOG overpayment determination is erroneous, the school must consider any information provided by the student and determine whether the objection is warranted BEFORE referring the case to ED. DO NOT refer cases involving overpayment of less than $25. Such cases will be returned to the institution. The student will still owe an overpayment and will continue to be ineligible for federal student aid funds at any school. For as long as you feel is reasonable, you should use all available means to recover the overpayment from the student, in accordance with the school's standard policies and procedures. To refer a Federal Pell or FSEOG overpayment case to ED, you must provide all information necessary for collection on the case. Each referral must be TYPED and submitted on your INSTITUTIONAL LETTERHEAD and should follow the format given on p. 64. Institutional Responsibility After referring an overpayment case, you cannot make further federal student aid payments to the student until you've received further notice from ED. In addition, you may be required to provide any relevant documentation in your possession. You may, at your option, withhold ACADEMIC transcripts from students who owe an overpayment, but you must release FINANCIAL AID transcripts at the request of the student or another institution. You should notify such institutions that the student owes an overpayment. Once an account has been reported to ED, you have no responsibility in the collection of the debt unless the student contacts you to make repayment. If a student whose overpayment case has been referred to ED notifies you that he or she wishes to make repayment, you should accept payment on behalf of ED and forward the payment to the address at the right. If the student wishes to establish a repayment schedule, he or she should contact ED's Student Receivables Division at (202) 708-4766. U.S. Department of Education/OPE Student Financial Assistance Programs Student Receivables Division 600 Independence Avenue, S.W. Room 5118, ROB-3 Washington, DC 20202-5320 (202)708-4766 Departmental Responsibility Upon receipt of an overpayment referral, ED will determine if sufficient information has been provided to initiate collection activity; any referral lacking sufficient information will be returned to the school. If the referral information is complete, you will receive a letter confirming receipt and acceptance of the overpayment referral. ED will then initiate collection activity, consisting of letters and telephone contacts in an attempt to establish a repayment schedule or to secure payment in full. Also, the student's record will become part of the databases that are matched against incoming FAFSAs. Any future FAFSA filed by the student will be flagged during processing; a comment will appear on the student's output document, explaining the overpayment and instructing the school and the student as to resolving the matter. |