Treatment	of	Overawards
If,	at	any	time	during	the	award	period,	a	student	receives	additional	OFA	that	was	not	considered	in	calculating	the
student9s	eligibility	for	Campus-Based	aid,	and	if	the	OFA	combined	with	the	expected	financial	aid	will	exceed	the
student9s	need,	the	amount	in	excess	of	the	student9s	need	is	considered	an	overaward.
The	treatment	of	overawards	in	the	Direct	Loan	Program	depends	on	whether	the	loan	has	been	fully	disbursed.	If	you
discover	that	there	will	be	an	overaward	before	Direct	Loan	funds	are	disbursed,	you	must	eliminate	the	overaward
through	the	packaging	process	by	canceling	or	reducing	the	amount	of	the	Direct	Loan,	or	by	canceling	or	reducing	other
aid	over	which	you	have	direct	institutional	control.
If	the	overaward	occurs	after	Direct	Loan	funds	have	been	disbursed	to	the	borrower,	there	is	no	Direct	Loan	overaward
that	needs	to	be	addressed;	however,	you	might	need	to	adjust	the	student9s	aid	package	to	prevent	an	overaward	of
Campus-Based	funds.
See	
Volume	4,	Chapter	3,	for	a	full	discussion	of	overawards	for	all	programs.
Campus-Based	Overaward	Threshold
Campus-Based	aid	need	not	be	reduced	if	the	overaward	doesn9t	exceed	$300,	which	is	the	overaward	threshold	for	all
Campus-Based	programs.	Note	that	the	$300	threshold	is	allowed	only	if	an	overaward	occurs	after	Campus-Based	aid
has	been	packaged	and	the	school	was	unaware	the	student	would	receive	additional	funds.	The	threshold	does	not	allow
a	school	to	deliberately	award	Campus-Based	aid	that,	in	combination	with	other	resources,	exceeds	the	student9s
financial	need.
Prohibition	on	Using	Pell	To	Pay	Loans
If	a	Pell	Grant	recipient9s	aid	package	includes	a	loan	and	the	package	must	be	adjusted	to	prevent	an	overaward,	the	Pell
Grant	funds	can9t	be	used	to	pay	back	the	loan.	A	payment	on	a	student	loan	isn9t	an	educational	expense.
Other	Packaging	Considerations
Initially	Ineligible	Programs	That	Gain	Eligibility
If	a	previously	ineligible	program	later	gains	
Title	IV	eligibility,	you	may	award	non-loan	Title	IV	aid	to	students	who	are
already	enrolled	in	the	program	retroactive	to	the	beginning	of	the	payment	period	in	which	the	program	becomes
eligible,	and	you	may	award	Direct	Loans	retroactive	to	the	beginning	of	the	period	of	enrollment	(usually	the	academic
year)	in	which	the	program	becomes	eligible,	assuming	that	all	other	student,	program,	and	school	eligibility	requirements
are	met.	You	may	not	award	Title	IV	aid	for	payment	periods	(non-loan	programs)	or	periods	of	enrollment	(Direct	Loans)
that	a	student	has	already	completed	at	the	time	the	program	gains	eligibility.
Financial	Aid	Offers	and	Notification	Requirements
Many	schools	use	a	financial	aid	offer,	in	either	paper	or	electronic	format,	to	notify	students	of	their	proposed	aid
package.	Whether	you	use	a	paper	letter	or	other	electronic	means	such	as	email,	you	must	fulfill	the	consumer
information	requirements,	as	described	in	
Volume	2,	Chapter	6.	You	are	also	responsible	for	certain	notifications	and
authorizations	at	the	time	of	disbursement,	as	described	in	Volume	4,	Chapter	1.
Schools	may	choose	to	use	the	College	Financing	Plan,	developed	by	the	Department	as	a	standardized	form	to	simplify
cost	and	financial	aid	information	provided	to	prospective	students.
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