Federal Student Aid Disbursem*nts (2024)

• I. PURPOSE
• II. REFERENCES
• III. DEFINITIONS
• IV. POLICY
• V. PROCEDURES
• Policy Maintenance Information

I. PURPOSE

This policy establishes guidelines for Federal Student Aid disbursem*nts.

Scope: This policy applies to Western Governors University (WGU) students.

II. REFERENCES

1. Financial Aid Overview
2. State Financial Aid Information

III. DEFINITIONS

1. Competency Units (CUs): The unit of measurement used to indicate the amount of instruction and learning required to achieve the student learning outcomes. One competency unit is the equivalent to one semester credit of learning in traditional grading systems.
2. Cost of Attendance (COA): An estimated cost of a student’s educational expenses for the academic year. The total student aid funds may not exceed the student's COA. The COA components for all Federal Student Aid (FSA) programs are:
   • Tuition and Fees (including the electronic versions of the required textbooks and other learning
     resources)
   • Books, course materials, supplies, and equipment
   • Food
   • Housing
   • Miscellaneous expenses (including federal student loan fees)
3. Direct Loan: Loans that the U.S. Department of Education gives to eligible students, these loans may be subsidized or unsubsidized. These loans are backed by the U.S Federal Government.
4. Expected Family Contribution (EFC): Expected Family Contribution (EFC) is calculated by using the information the student provides on the Free Application for Federal Student Aid (FAFSA). This number is used to calculate how much financial aid the student is eligible to receive. It is neither the amount ofmoney the student will have to pay at the University, nor the total amount of Federal Student Aid the student will receive.
5. Federal Student Aid (FSA): An office of the U.S Department of Education, that provides the majority of student financial aid in the U.S. The office provides student financial assistance in the form of grants, loans, and work-study funds.
6. Federal Supplemental Educational Opportunity Grant (FESOG): Does not have to be repaid and may be awarded to students who have not yet earned a bachelor’s degree. This grant is available for undergraduates with exceptional financial need. Limited funding has been given to WGU for this program; therefore, not all eligible students will receive this grant.
7. Higher Education Act (HEA): A federal law that governs the administration of federal higher education programs. Its purpose is to strengthen the educational resources of colleges and universities and to provide financial assistance for students in postsecondary and higher.
8. Institutional Student Information Record (ISIR): An electronic document automatically sent to schools that the student lists on their FAFSA (or adds later), and their related state agencies. It shows the outputs from the FAFSA, including EFC, eligibility matches, and information about a student’s aid history.
9. Iraq Afghanistan Service Grant (IASG): Does not have to be repaid and may be awarded to students who were either less than twenty-four (24) years old or enrolled in college (at least part-time) when a parent or guardian died as a result of U.S. military service in Iraq or Afghanistan after September 11, 2001. In addition, students must not be eligible for a Federal Pell Grant based on their Expected Family Contribution (EFC) but meet the remaining Pell eligibility requirements. The grant award is equal to the amount of a maximum Federal Pell Grant for the award year but cannot exceed the student’s Cost of Attendance for that award year.
10. Return of Title IV (R2T4): A calculation performed to determine the amount of FSA funds earned as of the withdrawal date when an FSA recipient withdraws from the University prior to the end of a payment period.
11. Student Aid Report (SAR): An electronic document sent or made available to the student online, it shows outputs from the FAFSA.
12. TEACH Grant: U.S. government provided funds for students who are enrolled in a TEACH Grant eligible program of study at a participating university.
13. Title IV Financial Aid: Title IV funds are Federal Student Aid (FSA) funds administered by the U.S. Department of Education. They include Federal Pell Grant, Iraq Afghanistan Service Grant (IASG), Federal Supplemental Educational Opportunity Grant (FSEOG), TEACH Grant, and Direct Loans (Subsidized Direct Loan, Unsubsidized Direct Loan, and Direct PLUS loan). FSA funds are awarded to a student under the assumption that the student will attend the University for the entire period for which the assistance is awarded.

IV. POLICY

1. Standard Disbursem*nt: Students must only use Federal Student Aid (FSA) funds for educational costs, to cover the Cost of Attendance (COA). WGU disburses FSA funds by crediting student accounts for allowable charges which include the current cost for tuition and fees, books, and supplies (technology), and prior charges not exceeding $200. If WGU obtains authorization from a student or parent (as applicable) during the Select My Financial Aid process, FSA funds may be used for other educationally related charges. Eligible other educationally related charges include and are limited to retake fees and/or a prior term balance not exceeding $200. Sixty (60) days before their FSA renewal, WGU sends students an email with a link for them to complete the Select My Financial Aid process.
2. WGU’s definition of prior year aligns with the Department of Education’s and is important for the calculation of a student’s maximum aggregate loan and other aid eligibility. Prior year is any loan period or award year prior to the current loan period or award year. If the student's Title IV aid package includes:
   1. Only Direct Loan, the current year is the current loan period
   2. Other aid only, no Direct Loans are included, the current year is the current award year
   3. Both Direct Loan and other aid, the current year is the current loan period
3. WGU's academic year is two six-month nonstandard terms. A term is based on completion of at least twelve (12) Competency Units (credit equivalents) for undergraduate programs and at least eight (8) Competency Units for graduate programs.
4. FSA funds are available to students based on six-month payment periods. Students are eligible to receive the disbursem*nt of Federal Student Aid funds at the start of the payment period or term provided they meet basic eligibility criteria and certain eligibility requirements, they must complete entrance counseling and if applicable, TEACH Grant requirements, to receive these funds.
5. Before making any disbursem*nts, WGU determines and documents that a student remains eligible to receive the FSA funds, including the completion of entrance counseling.
6. To receive TEACH Grants, students must meet all TEACH Grant requirements as listed in TEACH Grant Eligibility and Eligible Programs.
7. Federal Student Aid (FSA) Credit Balance: Whenever WGU credits FSA funds to a student account and those funds exceed the student’s allowable charges, FSA credit balance occurs. WGU pays the excess FSA funds directly to the student (or parent, in the case of Parent PLUS) as soon as possible but no later than fourteen (14) days after the balance occurred on the student account.
8. Paying FSA Credit Balance: WGU remits the credit balance to the student through a third-party payment processor (NelNet) via the preferred method selected by the student. For information on the payment selection process students should see How do I select/update my excess funds refund method? Students may select from the following options:
   1. Debit card: Students who select the debit card option must provide a reloadable debit card. Note: NelNet or WGU does not issue debit cards to students or endorse any card provider.
   2. Direct Deposit via Automated Clearing House (ACH): Students must provide information about an existing bank account or open an account at a bank chosen by the student. Note: Nelnet or WGU does not open a bank account on behalf of a student.
   3. Paper check: The credit balance is issued by check for students who do not select a preferred method of payment
9. Treatment of FSA Credit Balance when a student withdraws: For students who cease attendance during the term or payment period, WGU does not release any portion of the FSA credit balance prior to WGU’s completion of the Return of Title IV (R2T4) process. For information on this process students may see Return of Title IV Financial Aid.
10. Late Disbursem*nt: Students or parents, for a Direct Parent PLUS loan, become ineligible to receive federal financial aid funds on the date the student meets one of the following:
    1. For the Direct Loan program, is no longer enrolled at least half time, or
    2. For the FSA Grant programs (Federal Pell Grant, FSEOG, and TEACH grant), is no longer enrolled at WGU for the award year.WGU offers a late disbursem*nt to students who complete a payment period or withdraw during the payment period provided they meet the following conditions prior to the date they became ineligible:
       1. For one or some combination of Federal Pell Grant, IASG, FSEOG, Direct Loans, and TEACH – the US Department of Education processed a SAR/ISIR (from student’s FAFSA) with an official EFC.
       2. Additional requirements:
          1. FSEOG – student was awarded a grant
          2. Direct Loans – loan record was originated
          3. TEACH Grant – the grant was originated
11. Post-Withdrawal Disbursem*nt (PWD): FSA funds not disbursed before a student withdrew, but which the student has earned based on the Return Calculation, is called a post-withdrawal disbursem*nt. Students may see the details on the Return Calculation at Return of Title IV Financial Aid.
    1. Generally, a student is eligible to receive a post withdrawal disbursem*nt of the earned FSA funds that was not received. However, WGU will not make a late disbursem*nt at post-withdrawal even if a student otherwise meets the conditions for late disbursem*nt in the following situations:
       
       1. Second or subsequent disbursem*nt of Direct Loan funds unless the student has graduated or successfully completed the loan period;
       2. Disbursem*nts of Direct loan funds for which the borrower has not signed a promissory note;
       3. Disbursem*nt of any Title IV, HEA program assistance to a student for whom WGU did not have a valid SAR/ISIR by the deadline established by the secretary in the Federal Register.
12. WGU meets the requirement for a waiver of the thirty (30) day delayed disbursem*nt provisions for Direct Loans based on low cohort default rates (CDR). Consequently, WGU may make a disbursem*nt of a Direct Loan to a first-year, first-time borrower who withdraws before the thirtieth (30th) day of the program of study.
13. Paying a late disbursem*nt (including PWD) of Federal Student Aid Grant funds: WGU may credit a student account with a late disbursem*nt of Pell Grant, IASG, FSEOG, and TEACH Grant funds for current institutional charges (tuition and fees) without the student’s permission.

V. PROCEDURES

1. Time Frame for Submitting Disbursem*nt Records: WGU submits FSA disbursem*nt records no later than fifteen (15) days after making disbursem*nts or becoming aware of the need to adjust a student’s disbursem*nt.
2. Paying a late disbursem*nt (including PWD) of Federal Student Aid Grant funds: Excess funds are disbursed directly to students by ACH (Automated Clearing House) direct deposit, a reloadable debit card, or check, as determined by the student, within fourteen (14) days. For post-withdrawal disbursem*nts, WGU will make a disbursem*nt of grant funds within forty-five (45) days of the date WGU determined that the student withdrew.
3. Paying a late disbursem*nt (including PWD) of Federal Direct Loan funds: WGU notifies the borrower prior to making any late disbursem*nt of Federal Direct Loan funds and explains the borrower’s obligation to repay loan funds if they are disbursed, confirming that the loan funds are still needed to pay for current institutional charges. Students may accept or decline any late disbursem*nt of loan funds by emailing Financial Services at financialservices@wgu.edu.
   1. For post-withdrawal disbursem*nts, WGU offers the disbursem*nt of loan funds within thirty (30) days of the date WGU determined a student withdrew. Students have fourteen (14) days from the date of the last disbursem*nt letter to accept or reject the offer; otherwise, loan funds are cancelled.
   2. The written notification referenced in section V.3 includes the following:
      1. The type and amount of the loan funds WGU wishes to credit to the student account or disburse directly to student or parent, for Direct Parent PLUS loan;
      2. Explanation that a student or parent, for a Direct Parent PLUS loan, may accept or decline all or a portion of the funds;
      3. Explanation regarding the obligation to repay loan funds whether they are disbursed to the student account or directly to the borrower;
      4. Students or parents, for Direct Parent PLUS loan, may not receive the direct disbursem*nt of loan funds that WGU wishes to credit to the student account unless WGU agrees to do so;
      5. Information that no PWD will be made if the student or parent, for a Direct Parent PLUS loan, does not respond within fourteen (14) days of the date of the letter; and
      6. Information about the advantages of keeping loan debt to a minimum
   3. If students or parents submit a timely response via email to financialservices@wgu.edu accepting all or a portion of a late disbursem*nt, WGU makes a late disbursem*nt to student no later than one hundred and eighty (180) days after the date WGU determined the student withdrew, or for students who did not withdraw, one hundred and eighty (180) days after the student became ineligible.

Policy Maintenance Information

• Policy: Federal Student Aid Disbursem*nts
• Responsible Department: Financial Aid
• Effective Date: June 30, 2015
• Approved Date: June 30, 2015
• Viewability: WGU Community

Legacy Article Number: 50742