Title IV Credit Balances
After processing a student's R2t4 calculation as well as the student's institutional calculation and the student has a credit balance (federal funds the institution was allowed to keep from the R2t4 calculation exceed the institutional charges for the period), it is legal for a school to reduce the student's loan debt with the credit balance as long as the student has provided authorization to do so?
Kim,
If a student has a credit balance and the student has provided you with permission to reduce their loan debt by the amount of a credit balance, the institution may return the credit balance to the loan instead of providing it to the student. If you do not have a statement from the student providing this authorization, the institution would have to provide the credit balance to the student.
Thanks, Chyrl
