Withdrawals and the Return of Federal Title IV Funds
In general, the law assumes that a student “earns” approved (verified) federal financial aid awards in proportion to the number of days in the term prior to the student’s complete withdrawal. If a student completely withdraws from school or ceases to attend up through the 60% point during a semester (end of 9th week in a fifteen week semester), the school must calculate, according to a specific formula, the portion of the total scheduled financial assistance the student has earned and is therefore entitled to retain until the time the student withdrew. If a student receives (or the college receives on the student’s behalf) more assistance than he/she earns, the unearned funds must be returned to the Department of Education or the federal Stafford or parent’s federal PLUS loan lenders. If a student’s charges are less than the amount earned and a refund is due the student may be able to receive those additional funds.
The portion of the federal grants and loans that the student is entitled to receive is calculated on a percentage basis by comparing the total number of days in the semester to the number of days the student completed before he/she withdrew or cease attendance. For example, if a student completes 30% of the semester, he/she earns 30% of the approved federal aid that he/she was scheduled to receive. This means that 70% of the student’s scheduled or disbursed aid remains unearned and must be returned to the federal programs.
This policy governs the earned and unearned portions of the student’s federal Title IV financial aid only. It determines how much, if any, the student and/or the school may need to return. This policy does not affect the student’s charges. The college’s withdrawal policy will be used to determine the reduction, if any, in the student’s tuition and fee charges. The student is responsible for paying any outstanding charges to the college.
The college will determine the student’s official withdrawal date as follows:
- The date the student began the college’s withdrawal process (the date that the student officially notified the counseling center of his/her intent to withdraw); or
- Up through the 60% point of the semester or term if the student withdraws (“walks away”) without notifying the college; or
- The student’s last date of attendance at an academically related activity as documented by the college.
If it is determined that a portion of the financial aid received on the student’s behalf is unearned, the college shares with the student the responsibility of returning those funds.
Any grant funds the student is required to return to the federal program(s) will be considered an overpayment. The student must either repay the amount in full or make satisfactory payment arrangements with the Department of Education to repay the amount. If the student fails to repay or make payment arrangements to repay an overpayment the student will lose his/her eligibility to receive future federal financial aid at any institution. The student billing office will notify and provide instructions to students who are required to return funds to the government.
Allocating Returned Title IV (Federal) Aid
Funds that are returned to the federal government are used to reduce the outstanding balances in individual federal programs. Financial aid returned (by the college and/or the student or parent) must be allocated in the following order:
- Federal unsubsidized direct loan
- Federal subsidized direct loan
- Federal Perkins loan
- Federal Direct PLUS (Parent) loan
- Federal Pell grant
- Federal Supplemental Educational Opportunity Grant (FSEOG)
- Other federal loan or grant assistance
Students whose circumstances require that they withdraw from all classes are strongly
encouraged to contact the financial aid office and their academic advisor before doing so. At that time, the consequences of withdrawing from all classes can be explained and illustrated. The student billing office staff can also provide refund examples and further explain this policy to students or parents.
If you have any questions regarding the above information, please do not hesitate to contact the student billing office at 845-434-5750 by emailing us at: