Cannot Receive Graduate Aid Because I Was Over-Awarded for Undergraduate Work

[thump3r]

<p>I was recently accepted into a graduate, MBA program at one school. This school recently contacted me stating that I was over-awarded on subsidized loans at the school I completed by undergraduate work at. They said the aggregate amount is $23,000 and I was awarded $26,800. They said because of this over-award, they cannot award me graduate student loans. I was under the impression the aggregate from undergraduate and graduate work was higher than this limit but maybe because of the over-award it holds up everything else. They offered me the following two courses of action.</p>

<ol>
<li> Contact the undergraduate school and see if there is anything they can do like a reallocation or something similar.<br></li>
</ol>

<p>The graduate school said they have already contacted the other school on my behalf. I have also contacted them as well. We're just waiting on replies now.</p>

<ol>
<li> I could contact the lender and repay the over-awarded amount.</li>
</ol>

<p>I do not have an extra $4,000 to do this otherwise I wouldn't be asking for financial aid. I am also in the middle of consolidation to take advantage of the interest rate reduction so I am not sure how that would factor into it either.</p>

<p>Is this basically true though, the other school made an error (over-awarded) and now I have to suffer because of it? Are the only options those which they offered me above?</p>

<p>Thank you.</p>

[Kdog044]

<p>Well they are right that the maximum subsidized loans for UG is $23,000 and the maximum total for both sub and unsub is $31,000.</p>

[thump3r]

<p>Yeah, I am familiar with the loan maximums but I am not sure why the UG is affecting the GR aid. Maybe undergraduate maximums affect graduate aid in the future but I have not been able to find anything concrete concerning that.</p>

<p>I also thought the combined maximum total was $57,500 for independent students but $31,000 for dependents for undergraduates.</p>

<p>Thank you for your reply. It is appreciated. :)</p>

[sybbie719]

<p>Regarding overpayments:</p>

<p>

If the student fails to repay the overpayment, the school is required to refer the case to the US Department of Education. Failure to repay an overpayment may affect eligibility for further federal student aid, per 34 CFR 668.32(g)(4) and 34 CFR 668.35.</p>

<p>[FinAid</a> | Scholarships | Overaward Regulations](<a href=“http://www.finaid.org/scholarships/overawardregs.phtml]FinAid”>http://www.finaid.org/scholarships/overawardregs.phtml)

</p>

<p>

</p>

<p>If these adjustments have been made and an overaward still exists for a Stafford Loan borrower, you must withhold and promptly return to the lender or the federal government any funds that have not yet been disbursed to the borrower. If the student is determined to be ineligible for the entire loan
disbursement and the overaward cannot be reduced or eliminated, you must return the entire loan proceeds. Note that Stafford Loan overawards must be repaid before adjusting or canceling campus-based funds
<a href=“http://ifap.ed.gov/sfahandbooks/attachments/0506Vol5Chapter1.PDF[/url]”>http://ifap.ed.gov/sfahandbooks/attachments/0506Vol5Chapter1.PDF&lt;/a&gt;

</p>

<p>this part may help you:</p>

<p>

</p>

<p>If a student has inadvertently exceeded the subsidized annual oraggregate loan limit, it may be possible in some cases to eliminate the excess subsidized amount by changing it to an unsubsidized loan. The loan holder will determine whether this is an option.</p>

<p>If a student has consolidated the loan(s) that exceeded the annual or aggregate loan limit, he or she is considered to have made satisfactory arrangements to repay the debt, and no additional action on the part of the student is required.</p>

<p><a href=“http://ifap.ed.gov/sfahandbooks/attachments/0506Vol5Chapter1.PDF[/url]”>http://ifap.ed.gov/sfahandbooks/attachments/0506Vol5Chapter1.PDF&lt;/a&gt;&lt;/p&gt;

<p>

</p>

<p>If you are over the limit on subsidized loans see if you can have them changed to unsub loans.</p>

<p>Follow up on your consolidation to find out when it will be completed. When this is done, you should be ok.</p>

<p>Good luck</p>

[cptofthehouse]

<p>Thump were you an independent student as an undergraduate when taking out those loans? Along with what Sybbie and others have said, that might help you.</p>

<p>But, yes, there are maximums on loans that a lot of UGs don’t know and don’t care when they take out those loans.</p>

[thump3r]

<p>cptofthehouse,</p>

<p>I was an dependent part of the time and independent the other part. Not sure if that matters or not though.</p>