Are you expecting excess funds from your federal financial aid funds?
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 University defines an academic year as the time it takes you to successfully complete at least 24 credit hours and 30 weeks of instructional time.
Generally, academic years are divided into two payment periods. The first period ends after at least half of the credit hours and weeks are successfully completed — usually at least 12 credit hours and 15 instructional weeks. The second period is the remainder of the academic year.
Let’s assume that during a 24 credit-hour academic year, you receive $7,000 in FSA while your tuition and course materials fees total $5,000. You 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 you will incur institutional charges in the amount of $2,500.
Since the first payment period will incur charges of $2,500, and you will receive FSA funds of $3,500, you will receive $1,000 more in FSA than is needed for costs. In this case, once all aid is disbursed, you would be eligible to receive a refund of $1,000 in excess FSA funds.
Alternatively, excess funds can be returned to the lender to reduce student loan debt, at your request.
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 in 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 email@example.com.