Return of Title IV Funds
Withdrawal and Financial Aid
If a student withdraws from a class or from the college at any time, the college may be required to return a portion of the federal and/or state financial aid to the appropriate programs. Any balance created on the student’s account as a result of this transaction is the responsibility of the student. Students receiving financial aid who are considering withdrawing from a course or the college should contact the financial aid administrator before taking action. Refer to the Satisfactory Academic Progress (SAP) policy and the Title IV Refund policy for consequences of withdrawal.
Withdrawal and Return of Federal Aid (Title IV Refund Policy)
Federal regulations require each educational institution of higher learning to have a written policy for the refund and repayment of aid received by students who withdraw from all classes during a term for which aid has been received.
Who Does This Regulation Apply To?
These policies are effective only if the student completely terminates enrollment in all courses prior to the competing 60% of a payment period or term.
How Is Aid Eligibility Recalculated?
Recalculation is based on the percentage of earned aid using the following Federal Return of Title IV funds formula:
Percentage of payment period or term completed (the number of days completed up to the withdrawal date) divided by the total days in the payment period or term. (Any break of five days or more is not counted as part of the term.) This percentage of completed days is equal to the percentage of earned aid.
For Example: If you complete 40% of the semester, you earn 40% of the aid you were originally scheduled to receive. This means that 60% of your scheduled awards remain unearned and must be returned to the federal government. Once you have completed more than 60% of the payment period, you earn all your federal financial aid.
Title IV Refund Process
Funds are returned to the appropriate federal program based on the percentage of unearned aid. If a student earned less aid than was disbursed, the institution would be required to return a portion of the funds and the student would be required to return a portion of the funds. The institution must return the amount of Title IV funds for which it is responsible no later than 45 days after the date of the determination of the date of the student’s withdrawal.
Please note that when Title IV funds are recalculated and returned, the student borrower may owe a balance to the institution.
If a student earned more aid than was disbursed to him/her, the institution would owe the student a post-withdrawal disbursement. If a student is eligible for a post-withdrawal disbursement of funds, a letter with the post-withdrawal eligibility amount will be mailed to the student within 30 days of the date the school determined the student withdrew.
Post-withdrawal disbursements of grants will be processed automatically within 45 days of the date the school determined the student withdrew; however, post-withdrawal disbursements of loans will only be processed after obtaining the permission of the student. Once the post-withdrawal disbursement offer is received, the student must respond in writing via email or letter within 14 calendar days to have a post-withdrawal loan disbursement processed. The financial aid office will not process the loan amount unless notification is made in writing by the student in writing within the time frame allotted. The school will disburse any loan funds the student accepts within 180 days of the date the school determined the student withdrew.
Refunds are allocated in the following order, as applicable:
• Direct Unsubsidized Loan
• Direct Subsidized Loan
• Direct PLUS (Parent) Loan
• Federal Pell Grant
• Federal Academic Competitiveness Grant
• Federal Supplemental Educational Opportunity Grant
How Is the Withdrawal Date Determined?
Federal law requires that, when a student withdraws from all classes during the enrollment period, the amount of financial aid assistance “earned” up to that point is determined by a specific formula. The calculation of the Return of Title IV funds (and state funds, if applicable) is determined by the date that the student withdrew from all classes.
A student’s withdrawal date is determined by:
- The date the student officially notifies the institution of his/her intent to withdraw and completes the withdrawal form; or
- The student’s last date of attendance or the date documented at an academically-related activity, or
- If a student does not officially withdraw from all classes but fails to earn a passing grade in at least one course, federal aid regulations require that we assume the student has “unofficially withdrawn,” unless it can be documented that the student completed the enrollment period. Unofficial withdrawals require a Title IV refund calculation at the midpoint of the enrollment period.
What Happens if I Do Not Repay The Funds?
If there is a Pell Grant Overpayment and a student does not repay the funds within 30 days, the account will be turned over to the Department of Education as an overpayment of federal funds. Students who owe an overpayment of Title IV grant funds are ineligible for further disbursements from the federal financial aid programs at any institution until the overpayment is paid in full or payment arrangements are made with the Department of Education.
If a student does not pay funds due to the College to cover a tuition and fees balance that resulted from the college returning unearned federal funds, a hold will be placed on the students account. This means that you will not be permitted to register for classes or receive transcripts until your balance is paid in full.
The requirements for the return of Title IV program funds when a student withdraws are separate from the Aultman College refund policy. Therefore, a student may still owe funds to the college to cover unpaid institutional charges. The college may also charge a student for any Title IV program funds that the college was required to return. The college’s refund policy can be found in the Aultman College catalog and at www.aultmancollege.edu.