Monitoring and Resolving Defaults and Overpayments

    The U.S. Department of Education (ED) recently published a Dear Colleague Letter (DCL), GEN-00-18, concerning the actions a school must take when monitoring and resolving defaults and overpayments.  An audit performed by ED's Office of the Inspector General (OIG) determined that there has been instances where ineligible students received Title IV funds though schools were aware, or should have been aware, that those students were in default or owed an overpayment. The report also found instances where the school relied on inadequate documentation in determining that the default or overpayment had been resolved.  As a result of the OIG report, ED has prepared a document that reminds schools of their institutional responsibilities with regards to the statutory and regulatory student eligibility requirements.  The document is provided as an enclosure to the DCL.

    The DCL also notes that documentation used to show that a reported default or overpayment has been resolved must clearly identify the specific reported defaulted loan or overpayment and include the current status of the loan or overpayment.  In no case may a school accept or use documentation from any entity stating that it has "no record" of a student's defaulted loan overpayment.

    Questions concerning this DCL should be directed to ED's SFA Customer Service Call Center at (800) 433-7327, between the hours of 9:00 a.m. and 5:00 p.m. E.T., or by e-mail to sfa_customer_support@ed.gov.  A copy of this DCL is available on ED's web site at http://ifap.ed.gov.  If you are unable to access ED's web site and would like a hard copy of the DCL, please contact Stacey Roberts at (801) 321-7211.  Any questions regarding this Bulletin may be directed to the UHEAA Policy and Training Department at (801) 321-7166 or by e-mail at cjudd@utahsbr.edu.