Federal Student Aid Disbursements



Standard Disbursement

Federal Student Aid (FSA) funds are only used for educational costs. Western Governors University (WGU) disburses FSA funds by crediting student accounts for allowable charges which include the current cost for tuition and fees, books and supplies (technology), and prior charges not exceeding $200. If the University obtains a written authorization from student or parent (as applicable), FSA funds may be used for other educationally related charges.


Prior year is any loan period or award year prior to the current loan period or award year. If the student's Title IV aid package includes-

  • Only Direct Loan, the current year is the current loan period
  • Only non-Direct Loan aid, the current year is the current award year
  • Both Direct Loan and other aid, the current year is the current loan period

WGU's academic year is a two six-month nonstandard terms. A term is based on completion of at least 12 competency units (credit equivalents) for undergraduate programs and at least 8 competency units for graduate programs.

FSA funds are available to students based on six-month payment periods. Students are eligible to receive the disbursement of federal student aid funds at the start of the payment period or term provided they meet basic eligibility criteria and certain eligibility requirements to receive these funds. 


Before making any disbursements, WGU determines and documents that a student remains eligible to receive the FSA funds. This includes the completion of entrance counseling as well as the completion of the first 30 days of the academic program for new students at WGU.


Effective January 1, 2019, the University determines and documents that new students complete the first 50 days of the academic program before making a first disbursement of Direct Loan funds. 


To receive TEACH Grants, students must have:


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Federal Student Aid (FSA) Credit Balance

Whenever the University credits FSA funds to a student account and those funds exceed the student’s allowable charges, FSA credit balance occurs. The University pays the excess FSA funds directly to the student (or parent, in the case of Parent PLUS) as soon as possible but no later than 14 days after the balance occurred on the student account.



Paying FSA Credit Balance

The credit balance is remitted to student through a third-party payment processor (NelNet) via the preferred method selected by the student:


  • Debit card:  Students who select the debit card option must provide a reloadable debit card. Note: NelNet or WGU does NOT issue debit cards to students or endorse any card provider.
  • Direct Deposit via Automated Clearing House (ACH): Students must provide information about an existing bank account or open an account at a bank chosen by the student. Note: Nelnet or WGU does NOT open a bank account on behalf of a student.
  • Paper check: The credit balance is issued by check for students who do not select a preferred method of payment


Treatment of FSA Credit Balance when a student withdraws

For students who cease attendance during the term or payment period, the University does not release any portion of the FSA credit balance prior to the completion of the Return of Title IV (R2T4) process.


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Late Disbursement

Students or parents, for a Direct Parent PLUS loan, become ineligible to receive federal financial aid funds on the date the student:

  • For the Direct Loan program, is no longer enrolled at least half time, or
  • For the FSA Grant programs (Federal Pell Grant, FSEOG, and TEACH grant), is no longer enrolled at WGU for the award year

WGU offers a late disbursement to students who complete a payment period or withdraw during the payment period provided they meet the following conditions prior to the date they became ineligible:

  • For Federal Pell Grant, IASG, FSEOG, Direct Loans, and TEACH – the Department processed a SAR/ISIR with an official EFC
  • Additional requirements:
    • FSEOG – student was awarded a grant
    • Direct Loans – loan record was originated
    • TEACH Grant – the grant was originated


Post-Withdrawal Disbursement (PWD)

FSA funds not disbursed before a student withdrew, but which the student has earned based on the Return calculation, is called a post-withdrawal disbursement. 

Generally, a student is eligible to receive a post withdrawal disbursement of the earned FSA funds that was not received. However, WGU will not make a late disbursement at post-withdrawal even if a student otherwise meets the conditions for late disbursement in the following situations:

  • Second or subsequent disbursement of Direct Loan funds unless the student has graduated or successfully completed the loan period;
  • Disbursements of Direct loan funds for which the borrower has not signed a promissory note;
  • Disbursements of Federal Pell Grant funds to a student for whom the University did not have a valid SAR/ISIR by the deadline established by the secretary in the Federal Register;
  • Federal Pell Grant for a subsequent payment period when a student has not successfully completed the earlier payment period for which the student has already been paid;
  • For new students at WGU with a start date of January 1, 2019 or after, a first disbursement of Direct Loan funds to a borrower who withdraws before the 50th day of the program of study in accordance with the University's disbursements policy.


Paying a late disbursement (including PWD) of Federal Student Aid Grant funds

WGU may credit a student account with a late disbursement of Pell Grant, IASG, FSEOG, and TEACH Grant funds for current institutional charges (tuition and fees) without the student’s permission. Excess funds are disbursed directly to students by ACH direct deposit, a reloadable debit card, or check determined by the student within 14 days.
For post-withdrawal disbursements, WGU will make a disbursement of grant funds within 45 days of the date the University determined that the student withdrew.


Paying a late disbursement (including PWD) of Federal Direct Loan funds

WGU notifies the borrower prior to making any late disbursement of Federal Direct Loan funds and explains the borrower’s obligation to repay loan funds if they are disbursed confirming that the loan funds are still needed to pay for current institutional charges. Students may accept or decline any late disbursement of loan funds.

For post-withdrawal disbursements, WGU offers the disbursement of loan funds within 30 days of the date the University determined a student withdrew. Students have 14 days from the date on the last disbursement letter to accept or reject the offer; otherwise, loan funds are cancelled. 

The written notification includes the following:

  • The type and amount of the loan funds the University wishes to credit to the student account or disburse directly to student or parent, for Direct Parent PLUS loan;
  • Explanation that a student or parent, for a Direct Parent PLUS loan, may accept or decline all or a portion of the funds;
  • Explanation regarding the obligation to repay loan funds whether they are disbursed to the student account or directly to the borrower;
  • Students or parents,for Direct Parent PLUS loan, may not receive the direct disbursement of loan funds that WGU wishes to credit to the student account unless the University is in agreement to do so;
  • Information that no PWD will be made if the student or parent, for a Direct Parent PLUS loan, does not respond within 14 days of the date of the letter; and 
  • Information about the advantages of keeping loan debt to a minimum

If students or parents submit a timely response accepting all or a portion of a late disbursement, WGU makes a late disbursement to student no later than 180 days after the date the University determined the student withdrew, or for students who did not withdraw, 180 days after the student became ineligible. 


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Time Frame for Submitting Disbursements

WGU submits FSA disbursement records no later than 15 days after making disbursements or becoming aware of the need to adjust a student’s disbursement.

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Article Number: 50742

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‎12-10-2019 06:37 PM
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