Student Loans Refund - School wants money back

[Connolly]

My school gave me a loans refund in August, and now I find out they have done a number of "adjustments" and want over $5000 back. I have used the money and do not have to give it back. This has never happened to me before and I know they must have done something wrong (I did not change my schedule or drop any classes after I originally registered); the adjustments were made because of a fellowship neither they nor I knew I was receiving, but was applied, and because my classes are online and not on campus. That fellowship was only supposed to be given out for my first four years and I am in my 5th year now.

 

Is there any way I can get them to not ask for money back at this point? Once they gave me the loans refund refund I thought it was mine to keep/use; are they allowed to come back months later and say they want $ back?

 

What can I do to find out (since they won't just tell me) what/where in the process the school might have messed up with the calculations/timing? It seems odd to me that they would cut the refund check so early and then months later say try to take so much back - it seems the process of sending out refunds should not occur until fellowships and status of classes are taken into account (like I said I never changed my schedule from the very start).

 

Thanks!

[danieleWrites]

The school decides what kind of student loans you're allowed to have and, should they adjust that amount, can take it back. It seems odd that they're doing it now, however.

This is one of the things about government type programs. They can always take it back. First, I'd go to the financial aid office and find out what happened, specifically. Speak to a supervisor person, not a student worker. They can't not tell you what's going on with your financial situation; they have to disclose information about your loan. If you are responsible for repayment of funds, they are responsible for telling you how those funds were used, and that includes taking it back. If the school is of no use, I would check with ed.gov and find someone in the Department of Education to speak with. Inasmuch as the school can make adjustments, halfway through the semester is an incredibly weird time for that to happen.

You should be aware that it is against the rules to use certain student loan funds for anything beyond school related things, such as tuition, books, supplies, room, and board. No loan payments, doctor bills, dentist visits, shopping sprees, and so on.

[Lisa44201]

.... I know they must have done something wrong (I did not change my schedule or drop any classes after I originally registered); the adjustments were made because of a fellowship neither they nor I knew I was receiving, but was applied, and because my classes are online and not on campus. That fellowship was only supposed to be given out for my first four years and I am in my 5th year now.

 

Is there any way I can get them to not ask for money back at this point? Once they gave me the loans refund refund I thought it was mine to keep/use; are they allowed to come back months later and say they want $ back?

 

Unfortunately, these two sentences are not compatible; they are required to adjust your financial aid if you have other funding, like the fellowship; they did not do anything wrong.

 

So you have a fellowship for this semester; have you done any work related to it? If not, another option is to contact your supervisor at the fellowship and ask if he/she can write a letter stating you have not been working this semester. You should also find a copy of your fellowship contract which states it applies to years one through four only.

 

They are absolutely allowed to do this; technically they have not made a mistake. The error lies in this fellowship, not with the Financial Aid department.

[juilletmercredi]

I’m not exactly sure what you’re saying here.

 

So basically, you’re in a program and you are expected to pay tuition, i.e., up until now you didn’t have any scholarships or fellowships that were covering your tuition.  All of a sudden, your tuition disappears and you get a refund of your student loans?  Didn't that raise a red flag for you?  Although the school made the mistake, it is your mistake, too.  It’s also a student’s responsibility to be aware of how much they owe their university and pay their tuition, and if you got a larger refund than you expected, you need to investigate before spending the money.  That's why it sounds like they are asking for it back.

 

Yes, they are allowed to come and ask for the refund back if they gave it to you in error.

 

You should be aware that it is against the rules to use certain student loan funds for anything beyond school related things, such as tuition, books, supplies, room, and board. No loan payments, doctor bills, dentist visits, shopping sprees, and so on.

 

Medical expenses would be within the purview of personal living expenses, so you could use student loans for that.  Also, there’s absolutely no monitoring system in place, so while it’s not advisable to use student loans for shopping sprees or to pay on other loans, there’s nothing to prevent you from doing so.  However, I’m not really sure why this was brought up, since $5,000 over 3 months is less than $2000 a month which is a pretty frugal living budget if OP doesn’t have another job.

[danieleWrites]

I only brought it up because I think people are basically honest. If the OP heads to financial aid to find out what's going on, and the financial aid person asks why the OP doesn't have some of the money to return, the OP should know what's the what in order to answer appropriately. There's being honest and there's not realizing that monthly expenses should be divided up between what the loan supplies and what other income supplies.

 

Doctor bills are only within student loan purview if they're incurred by the borrower and within a certain time period from the disbursement of the loan. Student loans aren't to pay past due bills, other loans, and so on.

 

I understood that the OP received a fellowship, so would have been surviving on more than the $5,000 dollars, which would raise the amount of money s/he had per month up beyond less than $2,000 since disbursement. If that's the case, the financial aid person would have worked out a reasonable (according to the university) pay-us-back plan, which would include a lump sum of a portion of that $5k. I have seen this happen to people before. Bureaucratic over-payments suck rocks. The people in the office would love to be more helpful, but policy rules, and the policy is set by people who never meet the folks the policies run over.

 

The problem with any bureaucracy is that there is no one within the bureaucracy to advocate for you (the rhetorical you, not a specific you). In the university, we get advisers or mentors who can advocate for us, to an extent. For a lot of things, they can't (and most won't) do anything other than tell you the name of the office involved. The only person who will advocate for you is you. And advocating for yourself means knowing the rules and learning how to answer questions that are both truthful and fit in the rules.

[nugget]

Talk to them about it. If you don't have the money, you don't have the money. They will have no choice but to work out a repayment plan for you. If it is their mistake, perhaps you could get them to agree to not charge you interest on the $5,000 between now and the time you graduate.

[pearspears]

This happened to me and what I had to do was put it all on a credit card, and then use my NEXT refund check to pay off the credit card in full.

 

It sucks but there's really nothing you can do

 

If you can explain what happened to a credit union you might be able to get a signature loan if you have a job, or borrow against your car or house.