| AwardYear: 1995-1996 ChapterNumber: 3 ChapterTitle: Completing the Verification Process Section: Until Verification is Complete PageNumber: Withholding Payment If a student's application is selected for verification, he or she must complete the verification process or forfeit federal student aid eligibility. You have the authority to withhold the disbursement of any federal student aid funds until the student completes the required verification. Such a policy ensures that a student's application information and eligibility determination are absolutely correct before any funds are disbursed and, when enforced, will thereby substantially reduce the incidence of overpayments. Making Interim Disbursements Interim disbursement of aid prior to completing verification is allowable in many cases, AS LONG AS YOU HAVE NO REASON TO BELIEVE THE APPLICATION INFORMATION MAY BE INACCURATE. The specific limitations as they apply to each program are explained below. Be forewarned--you will be liable for an interim disbursement if verification reveals that the student has received an overpayment or if the student fails to complete verification. **[The "Making Interim Disbursements"chart on page 33 is currently unavailable for viewing. Please reference your paper document for additional information.]** THE FEDERAL PELL GRANT, FEDERAL PERKINS LOAN, AND FSEOG PROGRAMS. You may make one disbursement (of any combination of aid from these programs) for the applicant's first payment period, provided that you do not have any conflicting documentation on the student. If you make an interim Pell disbursement, you must designate the "W" verification code (Without Documentation) when reporting the payment to ED. (See the "Verification Status Codes" section in this chapter.) THE FEDERAL WORK-STUDY (FWS) PROGRAM. Prior to completing verification, you may employ an applicant for whom verification is required under FWS for up to 60 CONSECUTIVE DAYS after the applicant enrolled (or in summer employment for up to 60 days), provided you have no conflicting documentation on the student. If after 60 days verification has not been completed, you must cease employing the student under FWS. If you later discover that an overpayment exists, you should attempt to adjust the student's other aid. Otherwise, you must reimburse the FWS program from school funds. EXCEPT IN THE CASE OF PROVEN STUDENT FRAUD, YOU MAY NOT REQUIRE A STUDENT TO REPAY FWS WAGES EARNED. (See Chapter Five, "Overpayments, Referrals, and Suspected Fraud.") THE FEDERAL DIRECT SUBSIDIZED LOAN AND FEDERAL STAFFORD LOAN PROGRAMS. If you have no conflicting documentation on the student in question, you may certify a Federal Direct Loan application or a Federal Stafford Loan application for a student who has not yet completed the required verification process. You may not, however, deliver loan proceeds to the borrower or hold any proceeds for more than 45 days. If the applicant does not complete the required verification process within 45 days, you MUST return the loan proceeds to the lender. If you certify an application before verification is completed, you may later discover that the certified loan amount exceeds the student's need. In such a case, you MUST notify both the applicant and the lender within 30 days of the determination, and you must take steps to avoid overpaying the applicant. Ordinarily, you would make the first disbursement and instruct the lender to reduce the second disbursement by the appropriate amount. However, the amount of the first disbursement alone may in some cases exceed the student's need. In this case, you must either send the check back and ask the lender or escrow agent to process a new check in the proper amount, or you may disburse the proper amount to the student and refund the excess amount to the lender or agent. |