[Code of Federal Regulations]

[Title 34, Volume 3]

[Revised as of July 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 34CFR668.61]



[Page 471-472]

 

                           TITLE 34--EDUCATION

 

 CHAPTER VI--OFFICE OF POSTSECONDARY EDUCATION, DEPARTMENT OF EDUCATION

 

PART 668_STUDENT ASSISTANCE GENERAL PROVISIONS--Table of Contents

 

      Subpart E_Verification of Student Aid Application Information

 

Sec. 668.61  Recovery of funds.



    (a) If an institution discovers, as a result of the verification 

process, that an applicant received under Sec. 668.58(a)(2)(ii)(A) more 

financial aid than the applicant was eligible to receive, the 

institution shall eliminate the overpayment by--

    (1) Adjusting subsequent financial aid payments in the award year in 

which the overpayment occurred; or

    (2) Reimbursing the appropriate program account by--

    (i) Requiring the applicant to return the overpayment to the 

institution if the institution cannot correct the overpayment under 

paragraph (a)(1) of this section; or

    (ii) Making restitution from its own funds, by the earlier of the 

following dates, if the applicant does not return the overpayment:

    (A) Sixty days after the applicant's last day of attendance.

    (B) The last day of the award year in which the institution 

disbursed Federal Pell Grant, Federal Perkins Loan, or FSEOG funds to 

the applicant.

    (b)(1) If the institution determines as a result of the verification 

process that an applicant received Stafford Loan or proceeds for an 

award year in excess of the student's financial need for the loan, the 

institution shall withhold and promptly return to the lender or escrow 

agent any disbursement not yet delivered to the student that exceeds the 

amount of assistance for which the student is eligible, taking into 

account other financial aid received by the student. However, instead of 

returning the entire undelivered disbursement, the school may choose to 

return promptly to the lender only the portion of the disbursement for 

which the student is



[[Page 472]]



ineligible. In either case, the institution shall provide the lender 

with a written statement describing the reason for the returned loan 

funds.

    (2) If the institution determines as a result of the verification 

process that a student received Direct Subsidized Loan proceeds for an 

award year in excess of the student's need for the loan, the institution 

shall reduce or cancel one or more subsequent disbursements to eliminate 

the amount in excess of the student's need.



(Approved by the Office of Management and Budget under control number 

1840-0570)



(Authority: 20 U.S.C. 1094)



[56 FR 61337, Dec. 2, 1991, as amended at 57 FR 39089, Aug. 27, 1992; 59 

FR 22068, Apr. 28, 1994; 59 FR 23095, May 4, 1994; 59 FR 61207, Nov. 29, 

1994; 63 FR 40626, July 29, 1998]