School sent back loan....

[Tarak21]

What is the name of your state (only U.S. law)? Pennsylvania

I received a perkins loan to help cover the cost of my tuition 6 months ago. It was in the amount of 2000.00. Today my school sent me a letter saying I owe them 2300.00. I called and asked why and was told that because I had received veterans benefits chapter 35 because my step dad was a disabled veteran that they sent my loan back because my income had increased.
I am a dependent student so they go by my mothers income which is not a lot. Also if they were going to send the loan back they should have never told me I was eligible for it. They knew I received veterans benefits because the school has to certify my enrollment before I am even issued payment. How can they do this to me when a. my income has no warrant as to what I receive since it goes by my mothers income and b. why am I being held responsible for them not doing their job properly. If there were certain stipulations I never read them or was told of them. Nothing of the sort is mentioned in the promissory note I signed.

 

[Perky]

Your income is a factor in the financial aid formula. Did you fail to report it on your FAFSA?

http://www.ed.gov/programs/fpl/index.html

Financial need is determined by the U.S. Department of Education, using a standard formula, established by Congress, to evaluate the financial information reported by the student on the FAFSA. The information from the FAFSA then determines the student's expected family contribution (EFC). The fundamental elements in this standard formula are the student's income (and assets, if the student is independent), the parents' income and assets (if the student is dependent), the family's household size, and the number of family members (excluding parents) attending postsecondary institutions. The EFC is the sum of: (1) a percentage of net income (remaining income after subtracting allowances for basic living expenses) and (2) a percentage of net assets (assets remaining after subtracting an asset protection allowance). Different assessment rates and allowances are used for dependent students, independent students without dependents, and independent students with dependents. After filing a FAFSA, the student receives a Student Aid Report (SAR) or the institution receives an Institutional Student Information Record (ISIR), which provides the student's EFC.

 

[Tarak21]

No I did not fail to report it. I also am not an independent student so the EFC would be based on my mothers income which hasn't changed. I have called and called the school and left a message but they still have not returned my phone call....

 

[Some Random Guy]

As perroloco2 posted, the EFC is based on YOUR income and your mother's income. Your income has changed.

 

[Tarak21]

The fundamental elements in this standard formula are the student's income (and assets, if the student is independent)

I am NOT an independent student.

 

[Zigner]

The fundamental elements in this standard formula are the student's income (and assets, if the student is independent)

I am NOT an independent student.

The fundamental elements in this standard formula are the student's income.
If the student is independent, then the student's assets will also be considered.


There, I rephrased it for you - is it more clear?

 

[Peligroso27]

VA benefits are not considered income.

 

[Tarak21]

VA benefits are not considered income.

Exactly, I don't have to report them on my taxes but when filling out my FAFSA I checked the box that said I would receive them. Plus the school has to send my enrollment information to the VA. The school actually called me and I spoke with the lady who I was originally told that I needed to speak with, well she redirected me to someone else who of course is on vacation this week.

 

[Tarak21]

The fundamental elements in this standard formula are the student's income.
If the student is independent, then the student's assets will also be considered.


There, I rephrased it for you - is it more clear?

But I am not an independent student so why are my assets considered?

 

[Perky]

VA benefits are not considered income.

That's correct; they are considered resources though, and they affect the amount of the award. They still have to be reported. Semantics, really, unless you fail to follow the directions on the FAFSA.

From http://www.finaid.org/military/vedbenefits.phtml :

The HEA specifies in Section 480(b)(4) that these benefits are not reported on Worksheet B of the FAFSA. These benefits are generally considered to be resources. All other veterans benefits, such as income earned from the Veterans Affairs Student Work-Study Allowance Program (VASWSAP) and veterans noneducation benefits (e.g., Disability, Death Pension, or Dependency & Indemnity Compensation (DIS)) should be reported in Worksheet B of the FAFSA as untaxed income.

Note that although veterans education benefits are not reported on Worksheet B, there is a special question on the FAFSA that asks about veterans education benefits. This question asks for the number of months of benefits and the amount per month. (A common error is to report the annual amount of benefits, as opposed to the monthly amount. If the monthly amount varies, calculate the monthly figure by dividing the annual figure by the number of months of benefits.) The answer to this question does not affect the EFC.

It is important to understand whether a benefit is treated as a resource or as income. Resources reduce need-based financial aid dollar for dollar. So if you include a resource as income on the FAFSA, you will be penalized twice: once by having it increase your Expected Family Contribution (EFC) and once by having the resource reduce your Federal student aid eligibility.

Much of the discussion of veterans education benefits occurs in the sections that deal with overawards. Overawards occur when the total of a student's financial aid and resources exceeds his or her demonstrated financial need. When an overaward occurs, the school is required to reduce the financial aid package to compensate. This is basically a fancy way of saying that every dollar that is classified as a resource reduces the student's need-based financial aid by a dollar.

Because you are still dependent, your assets are not a factor. So, if you have a trust, property in your name, etc., those are not considered. Your income is ALWAYS a factor though. Income and assets are 2 separate things.

 

[Perky]

why am I being held responsible for them not doing their job properly. If there were certain stipulations I never read them or was told of them. Nothing of the sort is mentioned in the promissory note I signed.

They did their job properly. They don't make the rules, the federal government does. The school simply follows them. As the borrower, it is your responsibility to know the conditions of your loan. Did you not receive enough through your veteran's benefits to cover your tuition? If not, you may qualify for another type of loan.