OVER AWARDED. Are you afraid of those two words? Don’t be.

Over awarded. Those two words can be unsettling for students when they receive a message from the Financial Aid Office about reducing their financial aid package. However, it’s important to understand that the Financial Aid Office is simply fulfilling its duty by adhering to regulatory guidelines set by the Department of Education. This is not a punitive action, but a necessary step to ensure compliance.

Every institution that participates in the federal student aid programs must establish, each academic year, a cost of attendance budget. This budget is a powerful tool that depicts a student’s anticipated direct and indirect expenses for the academic year, helping students to plan and manage their finances effectively. Financial Aid Offices are responsible for preparing cost of attendance budgets for each division (e.g., undergraduate, graduate, and doctoral).

Strict federal student aid regulations stipulate that students cannot receive funding above their cost of attendance budget. So, if a student has a large loan that exceeds their cost of attendance budget, the Financial Aid Office must reduce the loan to avoid an over award. Too many awards can harm a College’s ability to comply with stringent regulations.

Over awards can also happen with need-based aid, especially with unsubsidized loans. Suppose a student receives additional scholarship funding from an external source. In that case, the Financial Aid Office must account for that scholarship funding as expected financial aid, which reduces the student’s financial need. Although it’s uncommon, it’s possible for a student to initially qualify for a subsidized loan at the start of the financial aid packaging process and then receive notification later in the financial aid packaging process that they no longer qualify for the subsidized loan. As ill-fated as it sounds, it’s all part of the Financial Aid Office’s role in meeting the regulations set forth by the Department of Education.

If you receive a notification about an over award, remember that you’re not alone. The Financial Aid Office is here to support you. Set up an appointment to discuss your financial aid package, why the over award happened, and your next steps. Avoiding an over-award helps students and their financial aid peers prevent audit findings. So, don’t agonize about an over-award notification. It’s not as frightening as it sounds.