Pell Grant Overpayment

A Pell Grant Overpayment happens when you are attending college and for any number of circumstances, you have to drop a class or all your classes’ altogether. Since your school has already paid for your classes, this would result in a Pell grant overpayment.
The title IV laws and regulations state that the school must provide you with the withdraw policy and the overpayment policy for the Pell Grant. There are no exceptions to the rules on this policy even if you have a death in the family or get too sick to keep attending school.
Here are a few examples of a Pell Grant Overpayment:

1. You are attending school full time and you are awarded a Pell Grant of $2000. Your classes get paid for and you are given the difference. You decide that your workload is too much and you must drop a class. If dropping this class takes you down to ¾ time, then your grant would be recalculated to $1500. You must then pay the school the $500 difference. It does not matter if you spent it, it must be paid back.

2. You are given a $500 Pell Grant for taking one class that costs $1500. One of your parents falls ill and you must drop out to take care of them. You are going to be required to pay back the $500 grant you received and you are not going to get a refund of the other $1000 you put in for the class.

Pell Grant Overpayments are very serious and you will not be able to get any federal financial aid, including loans, at any other school in the country until it is paid back. Some might think they can just get a student loan and pay back the grant. This is not possible; you must pay back the Pell Grant before you will be allowed to get any financial aid.

The government can also offset the Pell Grant Overpayment with a federal tax refund. If you have been hit with a Pell overpayment and you are expecting a IRS refund, they will take your refund to pay for the grant first.
In short, if you just stay in all your classes and do well in college, you will not have to ever worry about a Pell Grant overpayment.