Return of Funds Policy
Return of Funds Policy
FEDERAL TITLE IV RETURN OF FUNDS POLICY
- Federal law now specifies how a school must determine the amount of federal financial aid* that a student earns if s/he withdraws, drops out, is dismissed or takes a leave of absence prior to completing more than 60% of a payment period.
- The amount of federal financial aid assistance that the student earns is determined on a pro-rata basis. Once the student has completed more than 60% of the payment period, all financial aid assistance is considered to be earned.
Percent earned = Number of calendar days completed up to the withdrawal date**
÷ total calendar days in the payment period--excluding any scheduled breaks that are at least 5 days long.
Percent unearned = 100% minus percent earned
- When a student receives federal financial aid in excess of earned aid,
the school returns the lesser of:
Institutional charges (tuition and fees)*** multiplied by the unearned percentage, or
Title IV federal financial aid disbursed multiplied by the unearned percentage
the student returns:
any remaining unearned aid from the funds that s/he received as financial aid disbursement.
Any loan funds are repaid in accordance with the terms of the promissory note. That is, scheduled payments to the holder of the loan over a period of time.
Any grant amount the student has to return is a grant overpayment, and arrangements must be made with the school or Department of Education to return the funds.
Funds must be returned in the following order:
• Unsubsidized Direct Stafford loans (other than PLUS loans).
• Subsidized Direct Stafford loans.
• Federal Perkins loans.
• Federal PLUS loans.
• Direct PLUS loans.
• Federal Pell Grants for which a return of funds is required.
• Academic Competitiveness Grants for which a return of funds is required.
• National SMART Grants for which a return of funds is required.
• Federal Supplemental Educational Opportunity Grants (FSEOG) for which a return of funds is required.
• Federal TEACH Grants for which a return is required.
• Iraq and Afghanistan Service Grant for which a return is required.
- The student is billed for funds the college is required to repay. Federal law requires that the calculation assume that federal aid was used first to pay for education costs. Consequently, a student may owe a payment to the College for educational costs—even if the student received a tuition waiver or other scholarship or assistance.
*Federal financial aid includes the federal Pell Grant, Academic Competiveness Grant (ACG), federal Supplemental Opportunity Grant (SEOG), federal Stafford Loans (subsidized and unsubsidized), and federal PLUS Loans for parents.
**Withdrawal date is defined as the actual date the student begins the institution's withdrawal process, the student's last date of academically related activity, or the midpoint of the payment period for a student who leaves without notifying the institution.
***Book charges may not be included in institutional costs; however, a student remains financially responsible for any charges made by him/her in the College Bookstore.
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