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Ely, Counselor at Law
Category: Consumer Protection Law
Satisfied Customers: 99524
Experience:  Private practice with focus on family, criminal, PI, consumer protection, and business consultation.
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Could you answer a question about student financial aid? I

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Could you answer a question about student financial aid? I have an issue with an overpayment and the school is demanding that I come up with $30,000 over the next 2 weeks or I will be administratively withdrawn from the college. Can you help?
Hello friend. My name is XXXXX XXXXX welcome to JustAnswer. Please note: (1) this is general information only, not legal advice, and, (2) there may be a slight delay between your follow ups and my replies.

I am very sorry for your situation. Can you please tell me:

1) Is this a private or public school?
2) What do you mean by overpayment? What happened, exactly?

This is not an answer, but an Information Request. I need this information to answer your question. Please reply, so I can answer your question. Thank you in advance.
Customer: replied 3 years ago.

Hello - thank you for your help!

I am a provisional graduate student at Ithaca College (a private institution). Yesterday, I got a phone call from the director of student financial services saying that for the last academic year, I was awarded way too much money because I was a provisional graduate student and not a "full" graduate student. Somehow, I was processed as a graduate student and according to Ithaca College, I was mistakenly awarded Graduate PLUS loans (subsidized and unsubsidized) in the approximate amount of $44,000. But, now, they are saying I was only eligible for $12,500 for the year.

At this time, they are saying that they need to return $30,000 to the Department of Education and that it is my responsibility to come up with that money within the next 2 weeks, via private lenders.

My question is simply this: Is this actually my responsibility since the error was on the part of the college and NOT mine? I NEVER misrepresented my status in any way. Like I said, I am under a lot of pressure right now to come up with this money or quite likely be forced to withdrawal from the college. I just want to know what my "rights" are and if I am actually responsible for this or if the college is at fault and therefore, they are responsible for it.

Thank you again for your very kind assistance! April

Thank you for your clarification. Can you please tell me:

1) Do you not have the money?
2) Have you called the Dept. of Education directly and inquired about this matter?
Customer: replied 3 years ago.

No, I don't have the money. They are saying I need to get the money through private lenders. I have tried to contact them, but they keep passing me around and I'm getting nowhere. I am desperate for a real answer and was hoping you could help me. Thank you so much!

Thank you, April. Apologies in advance for the momentary wait while I am typing out your answer.
There are two issues that should be discussed here - who owes the money and can they withdraw you from the program?

What happens is that in such situations, the Dept. of Education approves the money to be sent to you based on what you and your school report. Here, if the school made a mistake and gave your profile more money that they should have, then it is their own fault. Now, the issue is that if you should not have had the money in the first place, that means that it should be returned.

What is happening is that the school is getting pressure from the Dept. of Education to return the money and fix the problem, but they cannot do so without your cooperation. So they are putting the pressure on you.

In summary, it is the school's fault, but it is also your problem as well.

To resolve this, one must contact the Dept. of Education directly. Not FAFSA, but the Department. This is (1-800-872-5327. Explain the situation and see what the options are.

The issue here is that this is a private school, and they can terminate someone's schooling if they wish for whatever cause that the administrative rules that they have written are. I am sure they can come up with something. The only way to stop them would be to threaten or to file suit, which you may not wish to do unless it is a last resort, I am afraid.

In summary, the best way to go about going with this is to speak with the Dept. of Education directly and resolve the issue.

An attorney is recommended. If finances are an issue, I can recommend three resources. First, here is a list of all pro bono work in the state...

…and another list:

Finally, you may call your local law school and see if they have a legal clinic place available. The legal clinic is a free service the school(s) provide to the community. While they are often overbooked, they have openings sometimes. Here is the list law schools in your state:

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