Return of Federal Financial Aid (Title IV)

Federal aid is awarded based on program length and generally disbursed between two payment periods. As the student progresses through the payment period, aid is earned on a pro rata basis. When a student completes more than 60% of any payment period, all aid for that payment period is considered earned and no refund is required.

Title IV refund policies apply only to eligible students scheduled to receive or have received federal financial aid (Pell Grant, Direct Stafford Loan, and PLUS). These formulas and processes are mandated by federal regulation and identify unearned funds that must be returned by the school, the student or both.

The school must return a portion of the excess (unearned funds) equal to the lesser of:
1. Your institutional charges multiplied by the unearned percentage of funds, or
2. The entire amount of excess funds

The school must return this amount even if it didn’t keep this amount of your Title IV program funds.

For any loan funds the student must return, the student (or parent for a Direct PLUS Loan) may repay in accordance with the terms of the promissory note.

Any amount of unearned grant funds that you must return is called an overpayment. The maximum amount of a grant overpayment that you must repay is half of the grant funds you received or were scheduled to receive. You do not have to repay a grant overpayment if the original amount of the overpayment is $50 or less. You must make arrangements with your school or the Department of

Education to return the unearned grant funds.

Federal regulation requires a 30 day disbursement delay for first time borrowers. If a new borrower withdraws from school prior to the completion of the 30 day wait period, the student is not eligible to receive those loan funds.

Based on the federal refund formula, aid is returned up to the net amount disbursed to the Department of Education in the following order:

1. Unsubsidized
2. Subsidized
4. Pell

Student and parent borrowers are notified of any return of federal funds via a written notice mailed to the addresses on file.

Effective: 1/1/16

As always, students wishing to withdraw should do so in writing and submit their notice via mail, email or in person to the Registrar or the Director of Administration. While verbal notice of withdrawal will be processed, it is in the student’s best interest to provide formal written notice.
The date of withdrawal shall be the postmark of the written withdraw notice delivered to the school; the date written or verbal notification is delivered in person; the date of an electronic notification; the date
the student fails to return from an approved leave of absence; or, the date the student is administratively withdrawn.

A student is considered to have withdrawn if he/she does not complete the clock hours and weeks of instruction in the payment period. The school has 30 days from the date the student is considered to have withdrawn to complete the Return of Title IV calculation and 45 days from that same date to submit all required refunds.

The Return to Title IV calculation applies to the percentage of the payment period completed therefore it uses a different time period than the institutional refund formula. The percent of the payment period completed is determined by dividing the scheduled clock hours of instruction as of the last day of attendance by the total clock hours in the payment period.

As the student progresses through the payment period, he/she earns the aid disbursed. If the amount disbursed exceeds the amount of aid earned, the unearned funds must be returned to the Dept. of Education. If the amount disbursed is less than the amount earned, and for which the student is otherwise eligible, a post withdrawal disbursement may be possible. The school must notify the student/parent of any post withdrawal disbursements within 30 days of the date of determination. Pell post-withdrawal disbursements must occur within 45 days of the date of determination. Loan post-withdrawal disbursements require the borrower’s permission to incur the debt. If the borrower submits a timely response that instructs the school to make all or a portion of the loan post-withdrawal disbursement, the school must disburse the funds within 180 calendar days of the date the school determined the student had withdrawn or, if the student did not withdraw, 180 calendar days after the student became ineligible. To best assure the loan post-withdrawal disbursement can be made by deadline, borrowers are asked to notify the school of their decision within 60 calendar days of the notice date.

Post withdrawal disbursements of Pell Grant will be considered before loan post withdrawal disbursements. The school will automatically use all or a portion of the Pell Grant post withdrawal disbursement toward outstanding program charges. Any financial aid not credited to the student’s account will be refunded to the student, however, it may be in the student’s best interest to keep these monies on account to reduce their school debt. Permission to do so must be in writing from the student.

The amount of aid earned by the student is determined by multiplying the percentage of Title IV aid earned by the total of Title IV aid disbursed plus the Title IV aid that could have been disbursed on the student’s behalf.

The amount of federal aid to be returned to the Dept. of Education is determined by subtracting the amount of aid earned from the total amount of aid disbursed. If the calculation determines the student is required to return funds, the school will notify the student. If the student fails to make this refund, he/she will be considered in an ‘overpayment’ and becomes ineligible for further federal financial aid until resolved.

Title IV funds are returned in a specific order as follows: Unsubsidized Stafford, Subsidized Stafford, PLUS, the Pell Grant Student and PLUS borrowers will be notified of the amount and source of returned funds. Students withdrawing from school are obligated to complete federal exit counseling on-line. An information packet will be mailed to the student with instructions and resource materials.

The Return to Title IV and the Institutional Refund calculations combine to identify the student’s remaining financial obligations to the school, if any. The school will mail an invoice for any charges remaining after Title IV aid is returned.

For examples of Title IV refund calculations, please see our Financial Aid Office.

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