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Return of Title IV Funds (R2T4)

The Return of Title IV Funds policy applies only if the student completely terminates enrollment (i.e., cancels his/her registration, withdraws, or is dismissed) or stops attending classes before completing more than 60 percent of the enrollment period. The Return of Title IV Funds policy applies to federal student financial aid programs. The Office of the Treasurer will calculate the amount of a refund of fees for students who withdraw. Contact the Office of the Treasurer for specifics (843) 953-5572.

The amount of Title IV aid that a student must repay is determined via the Federal Formula for Return of Title IV Funds as specified in Section 484B of the Higher Education Act. This law also specifies the order of return of the Title IV funds to the program from which they were awarded. The amount of Title IV aid earned is determined by multiplying the total Title IV aid (other than Federal Work Study) for which the student is qualified by the percentage of time during the term that the student was enrolled. A repayment may be required when aid has been credited to a student's account from financial aid funds in excess of the amount of aid the student earned during the term.

If less aid was disbursed than was earned, the student may receive a late disbursement for the difference. If more aid was disbursed than was earned, the amount of Title IV aid that must be returned (i.e., that was unearned) is determined by subtracting the earned amount from the amount actually disbursed.

Financial aid is returned in the following order:

  • Unsubsidized Direct Stafford loans (other than PLUS loans)
  • Subsidized Direct Stafford loans
  • Federal Perkins loans
  • Direct PLUS loans
  • Federal Pell Grants
  • Federal SEOG
  • Federal TEACH Grants
  • Iraq and Afghanistan Service Grant

Below are two examples of the calculations used to determine the amount of unearned aid a student would be expected to repay based on the reported last day of attendance of the term from which a student has withdrawn.

Example 1:

Brandon stopped attending classes on September 23rd and contacted Academic Advising to withdraw from the university. The term began on August 25th and is 109 days long. Brandon has attended 30 days and has earned 27.5 percent of his financial aid (30 days divided by 109 days equals 27.5 percent.

Brandon received in aid:

Federal Unsubsidized Stafford Loan

$    990

Federal Subsidized Stafford Loan

$  2722

Federal Pell Grant

$  2888

Total aid fall term

$ 6600

  1. The amount of federal aid earned is 27.5% x $6600 =      $1815.00
  2. Total federal aid unearned is $6600 - $1815= $4785.00
  3. The second calculation determines percentage of amount unearned based on school charges for tuition and housing. Brandon was charged $5450 in tuition and did not live on campus. Percentage of unearned aid for this second calculation is 100% - 27.5% = 72.5%. Therefore, based on the tuition charges for the term, $5450 x 72.5% = $3951.25.
  4. The amount of federal aid Brandon must return is the lesser of step or 3 ($3952 in our example after correct rounding).
  5. Federal guidelines determine the order of aid types to be reduced: Unsubsidized Stafford Loan, Subsidized Stafford Loan, and then Pell Grant until $3952 has been repaid. Therefore Brandon’s aid will be reduced to:

Federal Unsubsidized Stafford Loan

$   990

- $  990

=   $      0

Federal Subsidized Stafford Loan

$  2722

- $ 2722

=   $      0

Pell Grant

$  2888

- $  240

=   $  2648

Total aid returned

  $  3952

The total returned amount reflects the amount to be billed to Brandon’s student billing account from his financial aid. Any refunds from tuition that are determined and applied to his account may affect the amount that Brandon owes for the fall term.

Example 2:

Vivian stopped attending classes on September 10th and contacted Academic Advising to do a complete withdrawal. The term began on August 25th and is 109 days long. Vivian has attended 17 days and has earned 15.6 percent of her financial aid (17 days divided by 109 days equals 15.6 percent).

Vivian received in aid:

Federal Stafford Loan

$  2721

Perkins Loan

$  1000

Pell Grant

$  1350

Total aid fall term

$  5071

  1. The amount of federal aid earned is 15.6% x $5071 = $791.08
  2. Total federal aid unearned is $5071 - $791.08= $4279.92
  3. The second calculation determines percentage of amount unearned based on school charges for tuition and housing. Vivian was charged $5450 in tuition and $2,298 for housing. Percentage of unearned aid is 100% - 15.6% = 84.4%. Therefore, based on the charges for the term, $7748 x 84.4% = $6539.31
  4. The amount of federal aid Vivian must return is the lesser of step 2 or 3 ($4280 after rounding in our example).
  5. Federal guidelines determine the order of aid types to be reduced: Stafford Loan, Perkins Loan, and then Pell Grant until $4280 has been repaid. Therefore Vivian’s aid will be reduced to:

Federal Stafford Loan

$ 2721

-   $ 2721

=   $    0

Perkins Loan

$ 1000

-   $ 1000

=   $    0

Pell Grant

$ 1350

-   $   559

=   $ 791

Total aid returned

    $  4280

 

The total returned amount reflects the amount to be billed to Vivian’s student billing account from her financial aid. Any refunds from tuition that are determined and applied to her account may affect the amount that Vivian owes for the fall term.

Treatment of Title IV AidWhen a Student Withdraws

The Return of Title IV regulations specify how your school must determine the amount of Title IV program assistance that you earn if you withdraw from school. The Title IV programs that are covered by this law are: Federal Pell Grants, Iraq and Afghanistan Service Grants, TEACH Grants, Direct Loans, Direct PLUS Loans, Federal Supplemental Educational Opportunity Grants (FSEOGs), and Federal Perkins Loans.

Though your aid is posted to your account at the start of each period, you earn the funds as you complete the period. If you withdraw during your payment period or period of enrollment (your school can define these for you and tell you which one applies), the amount of Title IV program assistance that you have earned up to that point is determined by a specific formula. If you received (or your school or parent received on your behalf) less assistance than the amount that you earned, you may be able to receive those additional funds. If you received more assistance than you earned, the excess funds must be returned by the school and/or you.

The amount of assistance that you have earned is determined on a pro rata basis. For example, if you completed 30% of your payment period or period of enrollment, you earn 30% of the assistance you were originally scheduled to receive. Once you have completed more than 60% of the payment period or period of enrollment, you earn all the assistance that you were scheduled to receive for that period.

If you did not receive all of the funds that you earned, you may be due a post-withdrawal disbursement. If your post-withdrawal disbursement includes loan funds, your school must get your permission before it can disburse them. You may choose to decline some or all of the loan funds so that you don’t incur additional debt. Your school may automatically use all or a portion of your post-withdrawal disbursement of grant funds for tuition, fees, and room and board charges (as contracted with the school). The school needs your permission to use the post-withdrawal grant disbursement for all other school charges. If you do not give your permission (some schools ask for this when you enroll), you will be offered the funds. However, it may be in your best interest to allow the school to keep the funds to reduce your debt at the school.

There are some Title IV funds that you were scheduled to receive that cannot be disbursed to you once you withdraw because of other eligibility requirements.

If you receive (or your school or parent receives on your behalf) excess Title IV program funds that must be returned, your school must return a portion of the excess equal to the lesser of:

1. Your institutional charges multiplied by the unearned percentage of your 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. If your school is not required to return all of the excess funds, you must return the remaining amount.

Any loan funds that you must return, you (or your parent for a Direct PLUS Loan) repay in accordance with the terms of the promissory note. That is, you make scheduled payments to the holder of the loan over a period of time.

Any amount of unearned grant funds that you must return is called an overpayment. The College will return any unearned grant funds to the Department of Education. 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 must make arrangements with the Treasurer’s Office to set up payments if needed for returned funds.

The requirements for Title IV program funds when you withdraw are separate from any refund policy that your school may have. Therefore, you may still owe funds to the school to cover unpaid institutional charges. Your school may also charge you for any Title IV program funds that the school was required to return. If you don’t already know your school’s refund policy , you should ask your school for a copy. Your school can also provide you with the requirements and procedures for officially withdrawing from school.

If you have questions about your Title IV program funds, you can call the Federal Student Aid Information Center at 1-800-4-FEDAID (1-800-433-3243). TTY users may call 1-800-730-8913. Information is also available on Student Aid on the Web at www.studentaid.ed.gov .