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Overaward Policy

Federal and state need-based aid regulations (laws) stipulate that a student receiving federal or state need-based awards cannot receive assistance (from any source) over their gross financial need as determined by the analysis of the information submitted on the Free Application for Federal Student Aid (FAFSA).

Information is subject to change without notice due to changes in federal, state and/or institutional rules and regulations. Students must complete a FAFSA every year. Students must be making satisfactory academic progress to continue to receive financial aid.

An overaward is financial aid that exceeds a student’s financial need and/or cost of attendance.

Overawards are usually the result of the student receiving aid that the financial aid office was not aware of when they completed the student’s financial aid package and/or processed a loan application for the student. It is the student’s responsibility to provide written documentation indicating additional resources to the Financial Aid Office. Students should provide information as soon as they know they will receive the aid. MSU must account for all sources of aid, even if they are not processed directly through our office.

Overawards can also result from housing status changes, application errors by the student or the verification process results in changes made to the FAFSA data. Regardless of the reason for the overaward, we are bound by federal regulation to correct the overaward. Exceptions cannot be made for anyone.

The Financial Aid Office will take the following steps to correct an overaward.

  1. We will determine whether or not the student has increased financial need that was not anticipated at the time of the award and/or loan application.
  2. If no increased need is demonstrated and/or the student’s total aid still exceeds his or her need, we will cancel any undisbursed loans and/or return loan funds to the lender if the disbursement has already been made. In cases of extreme gift aid, the institution reserves the right to adjust institutional or campus-based aid within the boundaries of Federal regulations.
  3. If the student has no loans or the student’s aid still exceeds the student’s need after all loans have been canceled, we will reduce institutional grant and/or scholarship aid.

Any required adjustments will be made from the awards listed below in the order indicated. (Awards from private sources or MSU colleges or departments not listed below will not be reduced or canceled.)

  • Federal Work-Study
  • Alternative (Private) Loan
  • PLUS Loan
  • Grad PLUS Loan
  • Unsubsidized Federal Direct Loan
  • Subsidized Federal Direct Loan
  • Need-Based Scholarships awarded by the Financial Aid Office
  • Academic Scholarship Office Scholarships (Includes: Commonwealth, Kentucky Scholars Award, Dean’s Scholar, Governor’s Scholar, Rogers Scholar, Black Achiever, Diversity Opportunity, Alumni, Honors, Non-Resident Merit, Reciprocity Merit, Transfer Scholarship (both in-state and out-of-state).
  • Federal Teach Grant
  • KY Teachers Scholarship
  • Federal Supplemental Educational Opportunity Grant (SEOG)
  • KY College Access Program (CAP) Grant


The amount of the Federal Pell Grant and the Kentucky Educational Excellence Scholarship (KEES) are never reduced.

Athletic scholarship adjustments are not made for a student with a full grant-in-aid athletic scholarship who is also receiving a Federal Pell Grant -- SEC/NCAA rules will take precedence.

The cost of attendance (COA) is not the bill that you may get from your college; it is the total amount it will cost you to go to college each year. The cost of attendance is established by the financial aid office in compliance with federal law.

The COA includes:

  • Tuition and fees
  • On-campus room and board (or a housing and food allowance for off-campus students)
  • Allowances for books and supplies
  • Transportation
  • Loan fees
  • If applicable, dependent care.

It may also include other expenses like:

  • An allowance for the rental or purchase of a personal computer,
  • Costs related to a disability, or
  • Costs for eligible study-abroad programs.

Note: The COA for graduate and professional programs is usually higher than for undergraduate programs.

For students attending less than half-time, the COA includes tuition, fees, and an allowance for books, supplies, transportation, and dependent care expenses.

Your Expected Family Contribution (EFC) is an index number that colleges use to determine how much financial aid a student is eligible to receive. EFC is calculated according to a formula established by law and the information from a student's Free Application for Federal Student Aid (FAFSA).

The EFC includes these factors from a family's taxed and untaxed income, assets, and benefits (such as unemployment or Social Security). Family size and the number of family members attending college during the year are also considered.

Note: EFC is not the amount of money a family will have to pay for college and it is not the amount of federal student aid you will receive.

Cost of Attendance (COA) minus Expected Family Contribution (EFC) = Gross Financial Need

Federal and state need-based awards include the following:

  • Federal Pell Grant
  • Federal Supplement Educational Opportunity Grant (SEOG)
  • KY College Access Program Grant (CAP)
  • KY Teachers Scholarship
  • Need-Based Scholarship/Grant Programs from States Other than Kentucky
  • Federal Perkins Loan
  • Federal Work-Study
  • Federal Direct Subsidized Loan