UB Responds to Questions about Repackaging of Student Financial Aid

The University at Buffalo this fall announced it was repackaging the financial aid for students who were over-awarded financial aid in the form of loans and federal grants. UB's miscalculation of financial aid for two groups of students was discovered in August after UB completed a voluntary Standards of Excellence review performed by the National Association of Student Financial Aid Administrators.

As a result of this review and in accordance with federal requirements, more than 130 students have been asked to return aid that was overpaid to them. UB apologizes for the error and the hardship it may cause students; however, the university is required by federal law to seek repayment of the aid.

UB's financial aid office is working one-on-one with each student affected to develop a plan for repayment. We are ensuring each student receives the financial aid entitled to them for continued enrollment at UB.

Below are answers to frequently asked questions about why UB is required to repackage the financial aid of some students and seek repayment of over-awarded aid. Students who may have additional questions are encouraged to call UB's Student Response Center at (716) 645-2450.

Why did UB undertake a peer review of its financial aid program?

• As part of the UB 2020 focus on fostering excellence across the university and maximizing the efficiency of UB's business processes, UB requested a voluntary review to evaluate the effectiveness of its financial aid programs.

• We've undergone similar reviews for other areas of UB's business practices, including human resources, communications and technology.

What was the scope of the review of UB's financial aid program?

• National Association of Student Financial Aid Administrators (NASFAA) Standards of Excellence Review (SOE) is an objective, confidential peer review that assesses an institution's delivery of financial aid. Since 1999, NASFAA has conducted SOE Reviews at private and public, four-year and two-year institutions across the country. For more information, go to http://www.nasfaa.org/redesign/soe/index.asp.

What did the peer review find?

• According to the review, UB was not factoring in all financial resources of some students when determining the amount of federal loans and need-based grants a student was eligible to receive. For example, we were not factoring in the dollar amount of room and board provided free to our resident assistants when calculating how much federal aid they were eligible for.

• As a result of this oversight, some students this semester were "over-awarded" federal aid, primarily loans. It's as if a bank in error deposited $100 in a person's account. Of course that person would be required to return that amount.

• UB sincerely apologizes for the error. We have an ethical and legal obligation to correct it, working with affected students and according to federal law.

How and why did these problems occur?

• It was an oversight that resulted from our understanding of financial aid requirements. As soon as we were notified of the error we began implementing a solution to correct it.

Did the peer review recommend UB repackage students and that students repay?

• Yes, the peer review found that we were not in compliance with federal regulations. Therefore we have a legal obligation to repackage the financial aid of a group of students and recoup federal funding beyond what a student is eligible to receive.

• Federal over-award regulations require colleges to take into account any resources they know about or can anticipate when awarding or disbursing aid. In addition, federal regulations require colleges to reduce the size of the need-based aid package whenever the student receives resources that exceed financial need by more than $300.

• According to federal requirements, after repackaging all undisbursed loans and grants to students, if the resources still exceed financial need by more than $300, this amount is considered an overpayment. The student is required to either repay the overpayment in full or make arrangements to repay the overpayment that are satisfactory to the holder of the overpayment debt.

What are the repercussions of not repackaging student financial aid?

• It would be a violation of federal law and would be unethical. The financial aid in question is not UB funding; this is federal funding that must be administered according to specific legal guidelines.

How long has this error in UB's financial aid packaging been occurring?

• The peer review focused on 2006 to the present. We are only repackaging financial aid for groups of students who are currently enrolled this academic year.

How many students are affected?

• We have repackaged the financial aid for 195 veterans and 220 room/board waiver recipients.

• Of these students, 134 (70 veterans and 64 resident assistants) will need to repay federal aid, the majority of which were loans.

What type of financial aid were these students receiving?

• Federal loans, primarily, and grants awarded based on need. Veterans' benefits are not at all affected by this. Veterans will continue to receive the full amount of their VA benefits.

What's the total dollar amount of aid that was over-awarded to students?

• We've identified approximately $440,000, to date for the veterans and resident assistants who were over-awarded. To put that figure in context, UB annually distributes $218 million in financial aid to students.

How is UB working with the students who were overpaid financial aid?

• Financial aid advisors are working with each student on a case-by-case basis to determine their individual situation and discuss possible appeal options.

• We have procedures in place to assist students who are experiencing financial hardship. This includes restructuring of payments. Our advisors will explain this special payment option to the students involved.

What specifically is being done to assist veterans?

• Hundreds of veterans are enrolled at UB; most are not affected by financial aid repackaging. For those veterans who are impacted, UB has confirmed with these students that their veterans' educational benefits will not be reduced.

• Our objective is to provide them with all the financial aid that they are qualified for to meet the full UB cost of attendance (tuition, fees, housing allowances, books/supplies, personal, and transportation). UB has contacted each of the 70 veterans who were over-awarded financial aid and we are committed to ensuring they will have the resources needed to continue their studies.

Will any students have to withdraw from school?

• No, we will work with each student to make sure they are receiving financial aid needed to cover their educational costs.

• For those students who need to repay aid, we will work with them to develop a repayment plan that takes into account their individual needs. We will do whatever we can to help these students. For example, students will be able to register for both the upcoming spring and fall semesters, even though they may still owe a bill caused by these recent repackages.

Why doesn't UB simply forgive the overpayments or repay the aid itself?

• According to federal law, the funds over-awarded to students must be returned.

• If the university were allowed to absorb the cost of the over-awarded aid, the over-awarded funds would count as a resource against the students' financial aid package, and the students' aid would be reduced by that amount next semester.

Some students are suspicious about UB's motives and the timing of this issue. Is this in any way tied to state budget cuts?

• This has nothing to do with budget cuts. We undertook this review independently of budget considerations as part of the UB 2020 effort to evaluate everything the university does and make improvements where necessary.

Is it usual for a peer review to find this type of error at a university or college?

• Financial aid regulations are constantly changing and it's not unusual for an institution to misinterpret them or fall out of compliance. In fact, we just learned that the financial aid requirements for veterans will be changing for 2010-11. We will no longer be required to count veteran educational benefits as a resource in a student's aid package.

What are you doing to ensure this never happens again?

• We have already put procedures in place to obtain all resource information in aid packages prior to disbursement for the new aid year. Changes in benefit amounts will also be communicated to the financial aid office from the UB Veteran Affairs Office and Office of Residential Life. In addition, we have changed the way our financial aid program is administered and have reestablished the director of financial aid position.