Refund Policy/Return of Title IV Funds



Refund Policy for Students Who Receive Title IV Federal Financial Aid and Withdraw From School

If students withdraw from all classes (officially or unofficially) all Federal funds awarded must be recalculated. Federal Title IV Financial Aid includes: Federal Pell Grant, Federal Supplemental Educational Opportunity Grant (FSEOG), Teacher Education Assistance for College and Higher Education Grant (TEACH) and Federal Direct Stafford Loans.

The Higher Education Amendments of 1998 define “withdrawal” as failure to complete the period of attendance on which federal aid eligibility was based. This affects not only those individuals who complete the formal withdrawal process, but also those students who cease attendance from all classes. If a recipient of Title IV funds stops attending all classes during a semester, the Financial Aid Office must calculate how much federal aid was earned based on the length of time the student attended classes. Any portion of the awards that are unearned must be returned to the appropriate Title IV program.

The percentage of the term completed is determined by dividing the number of calendar days completed as of the date of withdrawal by the total number of calendar days in the term. If withdrawal occurs on or before 60 percent of the term has elapsed, the percentage of federal aid earned is equal to the percentage of the term completed. However, 100 percent of federal aid is earned if the date of withdrawal occurs after 60 percent of the term has elapsed.

The amount of federal aid earned is equal to the percentage of funds earned multiplied by the total amount of funds that was disbursed (or could have been disbursed) as of the day the student withdrew.


Repayment

All unearned portions of federal aid (institutional and student) must be returned to the appropriate Title IV program in the order designated by federal regulations. Unearned amount will be returned as follows:

 

The lesser of Total amount of unearned or institutional charges multiplied by unearned percent

Students must return the amount of unearned federal aid remaining after institution returns required funds.

Unearned funds are returned in the following order as required by federal regulations:

Unsubsidized Federal Direct Stafford Loans
Subsidized Federal Direct Stafford Loans

Direct PLUS Loans
Pell Grant
Academic Competitiveness Grant

National SMART Grant
FSEOG
TEACH Grant

Loan funds that must be returned by the student are repaid in accordance with loan terms.

When the institution returns funds on the student’s behalf (or parent’s if PLUS loan), the student’s account will be charged for this amount. When the responsibility for repaying funds to the Title IV grant program falls to the student, the student is required to return only 50 percent of the grant overpayment as calculated using the federal formula. Grant overpayments may be collected according to arrangements satisfactory to the school, or by overpayment collection procedures prescribed by the Department of Education.

 

REMINDER: The Refund Policy for Students Who Receive Title IV Federal Financial Aid and Withdraw

From School is separate and different from the Institutional Student Refund Policy which is included in the college catalog and may be viewed on the college website.

 

4/26/11


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