Dear Mr. Ethics,
We have a policy that a student becomes eligible for their overage check/remaining credit balance 10 weeks after their final disbursement for the academic year, roughly 10 months after their start date. My question is, if a student insists on getting their check before the allotted time frame, should we give it to them? I understand that the excess funds are for expenses that allow them to stay in school, but we do this to prevent fraud and deter "school jumpers" from coming to our school to just get a check and leave.
Obligated to Offer the Overage Earlier?
Really, you have answered your own question: The student needs those funds to stay in school. He or she should not have to find temporary resources or struggle to make do while his money is withheld by the school. Ten months after the start date is way too long, even for the student who has only unsubsidized loans and no Pell Grant.
The Department of Education (ED) is concerned for students who do not get funds awarded for non-institutional educational expenses on a timely basis. ED has even proposed that schools must apply aid to institutional charges proportionately in each payment period, so that students with sufficient aid can have cash disbursements in each period rather than waiting until the final payment period, after all institutional charges have been covered.
So, what can you do to guard against fraud and also adhere to NASFAA’s Statement of Ethical Principles, in which we commit to removing financial barriers for those who want to pursue postsecondary learning and support each student admitted to the institution?
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Publication Date: 9/22/2015