Return of Title IV Funds
The Office of Financial Aid is required by federal statute to recalculate federal financial aid eligibility for students who withdraw, drop out or take a leave of absence prior to completing 60% of a payment period or term. The federal Title IV financial aid programs must be recalculated in these situations.
Recalculation is based on the percentage of earned aid using the following Federal Return of Title IV funds formula:
The number of days completed up to the withdrawal date divided by the total days in the payment period or term equals the percent of the payment period or term completed. (Any break of five days or more is not counted as part of the term.) The percentage is also the percentage of earned aid.
Funds are returned to the appropriate federal program based on the percentage of unearned aid (100% minus the percentage of earned 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 may be required to return a portion of the funds. Keep in mind that when Title IV funds are returned, the student borrower may owe a debit balance to the institution.
If a student earned more aid than was disbursed to him/her, the institution will offer the student a post-withdrawal disbursement via a letter, which, if accepted, must be paid within 120 days of the student's withdrawal. The student must accept or decline the post withdrawal disbursement within the time frame indicated in the letter.
Refunds are allocated in the following order:
- Unsubsidized Direct Loans (other than Direct PLUS Loans)
- Subsidized Direct Loans
- Federal Perkins Loans
- Direct Graduate PLUS Loans
- Direct Parent (PLUS) Loans
- Federal Pell Grants
- Federal Supplemental Opportunity Grant
- Iraq and Afghanistan Service Grant