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Citations: (R)668.61 AsOfDate: 12/31/97 Sec. 668.61 Recovery of funds. (a) If an institution discovers, as a result of the verification process, that an applicant received under Sec. 668.58 (a)(2)(ii)(A) more financial aid than the applicant was eligible to receive, the institution shall eliminate the overpayment by-- (1) Adjusting subsequent financial aid payments in the award year in which the overpayment occurred; or (2) Reimbursing the appropriate program account by-- (i) Requiring the applicant to return the overpayment to the institution if the institution cannot correct the overpayment under paragraph (a)(1) of this section; or (ii) Making restitution from its own funds, by the earlier of the following dates, if the applicant does not return the overpayment: (A) Sixty days after the applicant's last day of attendance. (B) The last day of the award year in which the institution disbursed Federal Pell Grant, Federal Perkins Loan, FDSL, or FSEOG funds to the applicant. (b) If the institution determines as a result of the verification process that an applicant received Federal Stafford Loan or William D. Ford Federal Direct Loan proceeds for an award year in excess of the student's financial need for the loan, the institution shall withhold and promptly return to the lender or escrow agent any disbursement not yet delivered to the student that exceeds the amount of assistance for which the student is eligible, taking into account other financial aid received by the student. However, instead of returning the entire undelivered disbursement, the school may choose to return promptly to the lender only the portion of the disbursement for which the student is ineligible. In either case, the institution shall provide the lender with a written statement describing the reason for the returned loan funds. (Authority: 20 U.S.C. 1094) Note: Section amended December 2, 1991, effective with 1992-93 award year. (b) amended August 27, 1992, effective November 8, 1992. (a)(2)(ii)(B) amended April 28, 1994, effective July 1, 1994. |