Awarding Campus- CHAPTER

3
Based Aid

NEED-ANALYSIS FORMULAS Maximum campus-based aid

calculation
The Higher Education Act of 1965, as amended (HEA), provides a
single methodology for determining the Expected Family Contribution
(EFC) and cost of attendance (COA) for all Federal Student Aid (FSA) Financial Need
programs. Need-analysis and COA are discussed in Volume 1 - Student Aid from other FSA
Eligibility. If the student’s COA exceeds his or her EFC, the student has (-) programs and resources
need.
= Maximum
Before awarding aid from campus-based programs, the financial Campus-Based Aid
aid administrator must take into account aid the student will receive
from other FSA programs. The administrator must also take into
account other resources that the school makes available to its students,
resources about which he or she knows, or resources that the
administrator can reasonably anticipate at the time aid is awarded to
the student. An aid administrator may not award or disburse aid from
a campus-based program if that aid, when combined with all other
resources, would exceed the student’s need.

If, at any time during the award period, the student receives
additional resources that were not considered in calculating the
student’s eligibility for campus-based aid and if these resources
combined with the expected financial aid will exceed the student’s
need, the amount in excess of the student’s need is considered an
overaward.

RESOURCES
Resources, as defined by the campus-based regulations, include but Resources cite
are not limited to: 34 CFR 673.5(c)

• funds a student is entitled to receive from a Federal Pell

Grant;
• William D. Ford Federal Direct Loans (Direct Loans);
• Federal Family Education Loans (FFELs);

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• long-term loans made by the school, including Federal

Perkins Loans (short-term emergency loans are not
considered to be a resource);
• grants, including Federal Supplemental Educational
Opportunity Grants (FSEOGs), state grants, and Reserve
Officer Training Corps (ROTC) living allowances;
• scholarships, including athletic scholarships and ROTC
scholarships, and scholarships that require future
employment but are given in the current year;
• waivers of tuition and fees;
• fellowships or assistantships;
• veterans educational benefits paid under Chapters 30, 31,
32, and 35 of Title 38 of the U.S. Code;
• income from insurance programs that pay for the student’s
education;
• net income from need-based employment; and
• AmeriCorps funds (national service education awards or
post-service benefits under Title I of the National and
Community Service Act of 1990).
“Need-based employment” means employment that is awarded by
the school itself or by another entity to a student who demonstrates a
financial need for those funds for the purpose of defraying
educational costs of attendance for the award year. Only income from
need-based employment may be considered as a resource.

Non-need-based earnings are not to be considered as a resource

for the current award year because they will be reported as income on
the Free Application for Federal Student Aid (FAFSA) for the
subsequent award year and will be used in calculating the EFC.

To determine the net amount of a student’s FWS earnings that will

be available to help pay for his or her COA, the school must subtract
estimated taxes and job-related costs from the student’s gross FWS
earnings (see Volume 6 - Federal Work-Study). Any portion of the above
resources that is included in the calculation of the student’s EFC is not
considered to be a resource.

The school may treat a Federal PLUS Loan, Direct PLUS Loan,
Stafford substitution cite
unsubsidized Federal Stafford Loan, Direct Unsubsidized Loan, state-
34 CFR 673.5(c)(3)
sponsored loan, or a private loan as a substitute for a student’s EFC.
However, if the sum of the loan amounts received exceeds the
student’s EFC, the excess is a resource.

Stafford exclusion cite You may, as an option when packaging aid, exclude as a resource a
34 CFR 673.5(c)(4) portion of a subsidized Stafford Loan up to the amount of the
student’s Chapter 30 veterans education benefits (also known as the
Montgomery GI Bill -- Active Duty) and/or AmeriCorps funds. For an

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example of how this exclusion factors into a student’s financial aid

package, see volume 1. (Chapter 30 veterans education benefits and
AmeriCorps awards must be excluded from estimated financial
assistance when determining a student’s eligibility for a subsidized
Stafford Loan.)

Noneducational veterans benefits are not counted as a resource or

estimated financial assistance, as they are already counted in the EFC
formula as nontaxable income. Noneducational veterans benefits
include Death Pension and Dependency and Indemnity
Compensation (DIC) benefits.

OVERAWARDS
A financial aid administrator may not award or disburse aid from a
Overaward cite
campus-based program if that aid, when combined with all other
34 CFR 673.5
resources, would exceed the student’s need. If a student who has
already been awarded a financial aid package later receives additional
resources that cause his or her financial aid package to exceed his or
her need, the amount in excess of the student’s need is considered an
overaward.

There is a $300 overaward threshold for all campus-based

programs. The $300 threshold is allowed only if an overaward occurs
after campus-based aid has been packaged. The threshold does not
allow a school to deliberately award campus-based aid that, in
combination with other resources, exceeds the student’s financial
need.

STEPS TO TAKE IF THE TOTAL RESOURCES

EXCEED NEED
If a school learns that a student has received additional resources
that were not included in calculating the student’s eligibility for aid Resolving overaward cite
from the Perkins Loan, FWS, or FSEOG Program that would result in 34 CFR 673.5(d)
the student’s total resources exceeding his or her financial need by
more than $300, the school must take the following steps:

1. If the student’s aid package includes a loan under the FFEL

or Direct Loan Program, the school must first follow the
overaward requirements that are presented in Volume 8 -
Direct Loan and FFEL Programs. Also, a school may attempt to
reduce or eliminate the overaward by changing the function
of an unsubsidized loan (a Stafford Loan, a nonfederal loan,
or the parents’ PLUS Loan) from covering need to replacing
the EFC. (However, if the sum of the loan amounts exceeds
the student’s EFC, the excess must be treated as a resource.)
2. If there is no FFEL or Direct Loan in the student’s aid
package or if the school eliminates the FFEL or Direct Loan

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overaward and if, in either case, the student’s total resources

still exceed the student’s need by more than $300, the
school must recalculate the student’s need to determine
whether he or she has increased need that was not
anticipated when the school awarded aid to the student. If
the student’s need has increased and if the total resources
do not exceed the increased need by more than $300, the
school is not required to take any additional action.
3. If the school recalculates the student’s need and determines
that the student’s need has not increased or that his or her
need has increased but that the total resources still exceed
his or her need by more than $300, the school must cancel
any loan or grant (other than a Pell Grant) that has not
already been disbursed.
4. If the student’s total resources still exceed his or her need by
more than $300 and his or her resources include a Perkins
Loan and/or FSEOG, the amount that exceeds the student’s
need by more than $300 is a Perkins Loan or FSEOG
overpayment.
For a student employed under the FWS Program, if the school
recalculates the student’s need and determines that the student’s need
has increased and if the total resources do not exceed that increased
need by more than $300, the school may use FWS funds to pay the
student until the FWS award has been earned or until the student’s
increased need has been met. In addition, the school may continue
employing the student under FWS after the full amount of the FWS
award has been earned and the student’s financial need has been met;
however, the school may pay the student with FWS funds only up to
the time the income from need-based employment exceeds the
student’s financial need by more than $300. At that point, FWS funds
may no longer be used to pay the student. The school may continue to
employ the student, but funds other than FWS funds must be used to
pay the wages.

OVERPAYMENTS
In general, a student is liable for any Perkins Loan or FSEOG
Overpayment cite
34 CFR 673.5(f)
overpayment made to him or her. A Perkins Loan or FSEOG
overpayment is created whenever a student receives funds that
exceed his or her eligibility. For purposes of FSEOG overpayments,
when a school awards FSEOG using the individual recipient or
aggregate matching share methods, the FSEOG overpayment
amount includes only the federal share.

Exceptions to student liability

There are some exceptions to holding a student liable for a
Perkins Loan or FSEOG overpayment. A student is not liable for a
Perkins Loan or FSEOG overpayment when the school is liable for
it. Your school is liable for any amount of a Perkins Loan or FSEOG
overpayment (including amounts under $25) that occurred because

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your school failed to follow the procedures in 34 CFR parts 668,

673, 674, or 676. If your school makes a Perkins Loan or FSEOG
overpayment in any amount for which it is liable, you must
immediately restore an amount equal to the overpayment plus any
administrative cost allowance claimed on the amount to your
Perkins Loan fund, for a Perkins Loan overpayment, or to your
FSEOG account, for an FSEOG overpayment. The school may
attempt to collect the amount of the overpayment from the student
after it has returned the funds, but the debt is not considered a
Title IV debt.

A student is not liable for a Perkins Loan or FSEOG

overpayment that is less than $25 and is neither a remaining balance
nor a result of applying the $300 campus-based overaward threshold. Such
overpayments do not affect the student’s Title IV eligibility. Your
school need not attempt recovery of such overpayments, report
them to NSLDS, or refer them to the Department.

A campus-based overpayment that is less than $25 is a remaining

balance when the overpayment amount was originally $25 or more,
but is now less than $25 because the student made payments. A
campus-based overpayment that is less than $25 can also be a result
of applying the $300 campus-based overaward threshold. For example, a
school discovers that a student subsequently received additional
sources of aid that result in an overaward of $314, but the student
only has a campus-based overpayment of $14 after applying the
$300 overaward threshold. In both cases, the student is still
responsible for fully repaying the overpayment amount even though
it is under $25.

Actions to take when student is liable

If you can eliminate the Perkins Loan or FSEOG overpayment
by adjusting later FSA payments (excluding Pell) in the same award
year, the student is no longer liable. When that is not possible, you
must promptly attempt to recover the overpayment by sending a
written notice to the student requesting the repayment of the
overpayment. The written notice must state that if the student fails
to repay the overpayment, or fails to make satisfactory repayment
arrangements, the student will be ineligible for additional Title IV
funds until final resolution of the overpayment. The written notice
can be delivered electronically or via paper.

If a student claims that the school has made a mistake in

determining the Perkins Loan or FSEOG overpayment, you must
consider any information provided by the student and determine
whether the objection is warranted.

If the school determines that the student’s objection is not

warranted and the student still has not repaid or made satisfactory
arrangements to repay the FSEOG overpayment, the school must
refer the FSEOG overpayment to the Department for collection.
After referring the overpayment to the Department, you are not

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required to make any further attempts to collect the FSEOG

overpayment. However, you must report the unresolved FSEOG
overpayment to NSLDS. See volume 1 for specific information on
referring the unresolved FSEOG overpayment to the Department
and reporting it to NSLDS.

If after notification and consideration of any student’s objection,

the student still has not repaid or made satisfactory arrangements to
repay the Perkins Loan overpayment, the school is not required to
refer the unresolved Perkins Loan overpayment to the Department
for collection. The unresolved Perkins Loan overpayment remains
with the school so that payments collected from the borrower may
be returned to the school’s revolving loan fund. However, your
school must report the unresolved Perkins Loan overpayment to
NSLDS. See volume 1 for additional information on reporting the
unresolved Perkins Loan overpayment to NSLDS.

Impact of overpayment on student eligibility

In general, a student is not eligible to receive Title IV funds if
he or she is liable for a Perkins Loan or FSEOG overpayment.
However, a student who receives a Perkins Loan or FSEOG
overpayment may still be eligible to receive Title IV funds if the
student pays the overpayment in full, the student makes satisfactory
repayment arrangements, or the school can eliminate the
overpayment by adjusting later payments in the same award year.
See volume 1 for further details on student eligibility and
overpayments.

COORDINATION WITH BUREAU OF INDIAN

AFFAIRS GRANTS
Coordination with BIA Grants To determine the amount of campus-based aid for a student who is
cite or may be eligible for a Bureau of Indian Affairs (BIA) grant, a school
34 CFR 673.6 must first develop a financial aid package without considering any BIA
funds. If the total aid package—after BIA funds are added—does not
exceed the student’s need, no adjustment may be made to the aid
package. If the total package plus the BIA grant does exceed need, the
school must eliminate the excess in the following sequence: loans,
work-study awards, and grants other than Pell Grants. (The school may
not reduce a Pell Grant or BIA grant.) The school may alter this
sequence of reductions upon the student’s request if the school
believes the change would benefit the student. In determining the
amount of financial need for a student eligible for a BIA grant, a
financial aid administrator is encouraged to consult with area officials
in charge of BIA postsecondary financial aid.

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