[Oasfaa] Death of a student

[Karen Jeffers]

Greetings OASFAA,

We have an interesting situation regarding a student death and a request from the servicer to return funds.  The student passed away in August 2013, several days before disbursed FSA funds  to the student account with a subsequent refund of the TIV credit balance for the Fall 2013 semester. At the end of that term, we processed an R2T4 and returned the institution's portion of unearned aid because the student didn't have any earned hours.  Fast forward to February 2015 and we receive notification of the death, a year and a half later.  At the time of disbursement, based on the information we had the student was eligible for the disbursement.  Additionally, we processed a R2T4 and returned funds appropriately.  Interestingly, somehow the credit balance refund was cashed posthumous, so technically we don't have any unclaimed funds laying around.

Here is my question, since we now know the student passed away prior to disbursement, should we return all of the funds that were disbursed or would it be acceptable for the institution to only return the credit balance that was refunded to the student?

Thanks in advance for any insight you have.

Karen

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