Are you expecting excess funds from your federal student aid (FSA)?
Many students using FSA funds ask what happens if they receive more funding than they need to pay for tuition and course materials fees. This article will help answer some of those questions.
How funds are awarded
FSA funds are awarded based on a number of factors and on an academic year basis. The length of an academic year varies by program level, version and course length.
Generally, academic years are divided into two payment periods. The first period ends after at least half of the credit hours and weeks of instructional time are successfully completed, and the second period is the remainder of the required credits and weeks.
To give you a better idea of how this works, let’s use an example. Assume that during a 24 credit-hour academic year, a student receives $7,000 in FSA and incurs tuition and course materials fees totaling $5,000. The student authorized the University to retain the funds needed to pay for future applicable charges during the payment period.
Remember, one disbursement will be paid for each 12-credit payment period scheduled. In this example, the $7,000 FSA award would be divided in half and scheduled in two disbursements of $3,500 — one for each payment period.
Tuition and course materials fees are charged as incurred. In each payment period, let’s assume the student would incur institutional charges in the amount of $2,500.
Since the first payment period would incur charges of $2,500, and the student would receive FSA funds of $3,500, the student would receive $1,000 more in FSA than is needed for costs incurred at the institution. In this case, once all aid is disbursed, the student would be eligible to receive a refund of the remaining $1,000 in excess FSA funds, which could be applied against other non-institutional expenses that make up the student’s cost of attendance.
Alternatively, the student could elect to return the excess funds to the lender to reduce the amount borrowed and interest that accrues.
We hope that example helps clarify the process. Remember that the amount of FSA awarded to a particular student will vary depending on information specific to that student.
Additionally, please note that unless otherwise directed by you, any FSA funds received in excess of allowable charges for the payment period will automatically be sent to you no later than 14 days after your disbursement is posted to your student account. Once excess funds are determined, the amount will display on your student account summary.
The University can release your excess funds to you in one of two ways. Funds can be mailed as a paper check, or they can be direct deposited into your designated bank account.
You will make this election during the application process by completing the Credit Balance/Direct Deposit form on the University of Phoenix® Financial Aid Web. You can change this election at any time and as many times as necessary to suit your needs.
Please contact your Finance Advisor with questions or concerns. I can also be reached directly at firstname.lastname@example.org.