School incorrectly disbursed my loan: need help Forum

[Derekj032]

Just got my fall refund back and it was a whopping $3000. My school got a new fin aid person half way through last year and they made a huge mistake. I took summer classes and my refund was substantially larger than normal, which they said was because I was only taking 6 credits during the summer instead of the usually 16 during fall/spring. I looked up the department of education rules and aid is supposed to be given in equal installments. The amount you receive each semester is supposed to cover you until the next semester. However, the idiot at my school said I was supposed to "save" the extra summer money that was given to me to cover expenses for the entire school year. I think this is bullshit and they are trying to cover up their mistake. I used the summer money to pay off bills and commute 130miles 5 days a week to work. They pretty much told me I'm out of luck and can't get anymore money. Basically, if I can't get more aid, to at least cover my apartment, I will have to drop out. The law school rule book also says that all aid is to be disbursed evenly between either 2 or 3 semesters. Obviously, they did not distribute my aid equally. Not only am I screwed this semester, but next semester as well, since according to them the "extra" summer money should have been saved by me to cover expenses for the entire year! Has anyone else had any kind of problem like this? Just trying to see what my options are.

[christinenyoung]

If you knew your refund was larger than normal and they told you it was to be used for the rest of the year, regardless of whether or not the "larger" part of the disbursement was actually supposed to be disbursed during fall instead of summer... why did you not heed their advice? Did you think they were going to say "just give it back, we'll disburse it in fall?" They told you it was for the rest of the year.

Despite them disbursing some Fall aid during summer, where have they erred?

[Derekj032]

If you knew your refund was larger than normal and they told you it was to be used for the rest of the year, regardless of whether or not the "larger" part of the disbursement was actually supposed to be disbursed during fall instead of summer... why did you not heed their advice? Did you think they were going to say "just give it back, we'll disburse it in fall?" They told you it was for the rest of the year.

Despite them disbursing some Fall aid during summer, where have they erred?

First of all, according to them the extra summer money was supposed to be used to supplement my tiny fall and spring 2013 semesters refunds. When I first received the summer loan, I called them and they said it was bigger because I was taking less credits and loans were the same for each semester, which meant a larger refund. They did not say that it would lower my fall and spring loan amounts. Once I received a tiny loan refund for fall, they told me that I should have saved the summer. Federal law mandates that loans are to be disbursed in equal amounts, and also my schools rules & regulations state the same. They told me it was for "the rest of the year," 4 months after it was given to me. I'm working with the department of education, but it is a slow process and at first they even said "the school has discretion for loan disbursement," which is when I pointed them to the their own law saying otherwise. They literally said "wow, we didn't know that" and are now working with "specialists" to figure the situation out.

Loans are made to last a semester, money is not meant to be used for any period except the one in which the loan is disbursed. This is why schools have a COA (cost of attendance) figured out. If they were allowed to disburse an entire years worth of loan money at once it would obviously cause problems. What if someone drops out, gets kicked out, or for any number of reasons stops attending school? They would have all this extra money, and good luck getting it back from them. This is exactly the reason that loans are required by law to be disbursed EQUALLY between all yearly semesters. If for some reason it was found that the school did have discretion over disbursement amounts, they would have still grossly exceed the summer COA. Either way you look at it, it's apparent that someone made a mistake and now I'm paying for it. (literally)

The point of my thread was to see if this same mistake had happened to other law students. So again, have any other students received his or her loan disbursement(s) in the same manner that I have?

[cinephile]

At my law school, you can apply for a budget increase later in the semester (like to cover interview expenses) and you can receive half the loan after it's processed in the fall, and half in the spring.

You need some kind of documentation to apply for a budget increase, but maybe a copy of your lease would do it as you could demonstrate your COA should be increased as the current amount (looks like 6k total over the academic year) won't cover it.

[Tom Joad]

I think disbursement is actually the government transferring the money to the school. Your loans may have been equally disbursed between summer, fall, and spring. Since you had less credits your tuition and fees were less over the summer so you got a much bigger refund. They may have not messed anything up. Maybe they were just unclear.