Maintained for Historical Purposes

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

Until Verification is Complete

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.

Last Modified: 06/11/1998