University took 11 months to disperse aid. Anyone else have this?

Paying for College Financial Aid (Need-Based, Merit Aid, Loans)
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Second year at the same school as the first year. My school did not release my federal award until 11 months after the Department of Education sent my completed application to the university in June 2024. The financial aid office at the university froze the disbursement of my federal aid award (grants, work-study, etc.) in their account for 12 months. I pulled out of school after the fall semester due to no financial aid funds. The FA office kept requesting weird documents from my separated parents, well into the spring term 2025, under the guise of ‘clarification.’ Mind you, I had dropped out in December. By May 2025, my one parent that I live with was still sending the requested documents, like separation papers. We were always hoping that it would be the end of the verification process. Then, in May, the school sent my unpaid fall 2024 tuition bill, to collections. One week later, I received communication from the university that my financial aid award had arrived in my university account. It said: Congratulations! I inquired about it. They automatically sent that money to the collections agency to pay for my fall 2024 unpaid balance. The school didn’t ask; they just sent it. The collection agency, of course, has added on like $6,000 in fees. I have gone round and round with the school offices–each office shifts the responsibility to another office. The Student Accounts told the dean of students that my financial award was applied to my account in mid-September (3 weeks after the start of school and in violation of federal law that awards must be sent to the student’s account within 10 days of the start of school. But the funny thing is, it was not applied in September, but actually May 20, 2025. Am I in the Twilight Zone? What the h@ll is going on?

I am looking for an attorney to look at my massive file of indexed communications. Legal advice says to aim for the Higher Education Complex Compliance, Title IV. So far, cannot local this kind of civil attorney. Any advice?

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@kelsmom @Hanna Any insights for OP?

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Deleted.

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I can’t know what happened, but I have some guesses.

First of all, the 10 day rule is that funds cannot be disbursed more than 10 days prior to the start of school. Forget that, as it has nothing to do with your situation.

You clearly were selected for verification - I know this because you were asked for additional documentation. Your school was not allowed, by federal regulations, to release your financial aid funds to your account until your verification was successfully completed (in some instances, a school can make an interim disbursement pending the student competing verification … but if the student doesn’t complete verification, the school will remove that aid). As you indicated, your verification was not successfully completed until May, at which time funds could be disbursed to your account. At that time, the money was (as allowed by federal regulations) applied against the amount you owed the school (it can’t be applied against any of the collections fees).

A possible explanation for student accounts saying your financial aid was applied in mid-September would be if it was … and if you subsequently made a change to your FAFSA that prompted selection for verification. (Or if you were initially selected for verification, and the school made an interim disbursement, you didn’t promptly complete verification, and the aid was removed.) At that time, all aid would have to be backed off your student account until you completed verification (in your case, in May). Check your student account … was aid paid & later backed off?

At the schools where I worked, we would have held off from sending a student account to collections if a student was actively working toward completing verification. However, schools are legally able to send the account to collections according to their own policies. If you left school & stopped communicating, they may have assumed you weren’t going to complete verification.

I encourage you to continue trying to resolve this issue with the school. If you have emails documenting your continuing efforts to resolve verification before the account was sent to collections, show them to the school. See if you can get the collections fees removed. Do you still owe money aside from the collections fees? You’ll need to be prepared to offer to pay that money if requesting that the collections fees be removed.

But first … you need a complete printout of every transaction on your student account to try to make sense of the timeline. And you need to know the date your FAFSA was selected for verification (go to your FAFSA account to find that). If you want, you can PM me with more info (I was a financial aid director).

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