Treasury Offset Program FAQs

When individuals, businesses, states, and other entities owe money to the federal government.  That is considered a debt.

When a debt becomes delinquent, Treasury Offset Program (TOP) helps collect the debt for the federal government by holding back money from a federal payment to the debtor.  Holding back money from a payment is called offsetting the payment.  TOP may offset many types of federal payments to collect delinquent debt.

At Drexel, TOP typically impacts draw downs on federal awards since they are the most frequent and largest payments the university receives from the federal government.  Most often, what is being offset from the university's grant draw downs are over-payments of student's Veteran's educational benefits. These over-payments to a student's account occur when the student's balance changes after a payment has been made by the Veteran's Administration to Drexel. 

The University is required to return over payments of veteran's educational benefits to the Veteran’s Administration (VA) in cases where a student’s balance changes after payment has been received by Drexel.  Changes in student balances can occur due to dropped/withdrawn courses or the addition of financial awards (internal or external).  There is no limit the number of changes (by student or in total) that can be made or a set timeline within which these changes must occur.

Drexel is notified of a required return of benefits by a VA Debt Letter, which is sent from the VA via US Postal Service as they become aware of a change in student balances.  The University receives one letter per student per debt.  The return of funding must be received by the VA within 45 days from the date of the VA Debt Letter.  If the funds are not returned in 45 days then payments due to Drexel can be subject to the Treasury Offset Program.

Student overpayments are refunded to the VA using a departmental purchasing card using the VA portal.  The VA portal has limitations to the number and total dollar amount of transactions that can be made in a 24 hour period. Typically, we are limited to a maximus of $20,000 per day.

Inability to process all VA Debt Letters at once due to the limitations within the VA portal, receiving Debt Letters via US Postal Service due to the VA’s lack of an electronic notification system and a high number of changes occurring at one time can cause delays in the return of funds to the VA.

Any federal payments due to the University are subject to the Treasury Offset Program (TOP).  The typical reason for a TOP withholding is when veteran's educational payments are not processed within 45 days of the date the Veteran's Administration Debt Letter was mailed.

Federal grant funding is usually the funding that has the TOP withholding offset against it.  Research Accounting Services handles posting all grant payments so as such, they work with the Drexel Central team to find out who the students are that have been subjected to the TOP.  Once that information is ascertained, Drexel Central applies the payment of the veteran's benefits to the student's account.  Research Accounting handles the related journal entries to make the research payment whole.

When a Treasury Offset Program withholding occurs, draw-downs from federal grants are typically the ones that have the deduction.  This does not impact the principal investigator's ability to continue his or her research.  It just causes a few accounting entries to be done in the background to satisfy the debt.  Your grant will have its full amount of its payment applied to it and should never be impacted.

If you have any questions about the Treasury Offset Program and how it works or impacts your federal award, you can contact Terrence Finney at 215.895.6053 or via email at