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Return
of Title IV Funds
There is a federal law about paying money back if you leave school.
If
you receive a grant and then withdraw from all of your classes,
you may owe money back to the Federal Program. Here’s
how it works:
According to the day you withdraw, the Financial Aid Office will
calculate the part of the grant you have earned and what you owe.
Note: If you withdraw after you have earned 60% of your grant,
you will not owe any repayment.
Example: Say you get a $1000 grant. If there are 131 days in the
term and you drop out on the 34th day, then you earned 26% of your
grant.
The financial aid office will multiply your grant money and figure
out what you earned, and did not earn.
$1000 grant x 26% = $260 earned; $1000 x 74% = $740 unearned.
The college will owe some money back depending on the number of
units you took:
You took 12 units @$26 each = $312 x 74% (unearned) = $231 the college has
to pay.
You will have to pay back the unearned amount, minus the college
share, times 50%.
$740 - $231 = $509 x 50% = $255 you have to pay the federal program.
Income earned from Federal Work Study (FWS) Program does not have
to be repaid. That is money you have earned from working and is
not required to be repaid under this law.
Planning to withdraw from your classes or drop out of school?
Please think again.
Consider discussing your decision with your instructor(s) and/or
counselor. There may be programs or services to help you stay
on track with your educational goals.
However, if you must leave, begin with the Admissions and Records
Office. They will inform you of the steps to take.
Also, you must inform the Financial Aid Office as well to avoid
any possible penalties or delays that could affect future aid.
If you owe money and it is not taken care of, the Financial Aid
Office will have to put a national HOLD on your student aid eligibility.
REGULATION
All students receiving federal financial aid who completely withdraw
within the first 60% of a term, payment period, or period of enrollment,
are subject to the refund provision.
Effective Fall 2000, the responsibility to repay unearned aid
is shared by the Institution and the student in proportion to the
aid each is assumed to possess.
During the first 60%
of the enrollment period, the student “earns” Title
IV aid in direct proportion to the length of time he or she remains
enrolled.
Percentage is calculated by dividing the number of days completed
in the term by the number of calendar days in the term. Percentage
is applied to the amount of disbursable aid to the student for
that period of enrollment.
THE 60% point for spring 2006 Is April 27, 2006
REQUIREMENTS
Student: Shares
in repayment of Title IV Funds awarded that are unearned. The
student’s share is the difference between the total unearned
amount and the Institution’s share of unearned aid. The
student must repay their share of the unearned funds within 45
days after being billed by the District or set up a repayment
schedule with the Department of Education.
Institution: Shares
in the repayment of Title IV Funds for the unearned portion of
tuition and fees. Institutional share is the lesser of the total
amount of unearned aid or institutional charges multiplied by
the percentage of aid that was unearned. The Institution must
make post-withdrawal disbursements to eligible students who earned
more aid than was disbursed prior to withdrawal. The Institution
must define and publicize its withdrawal process.
OPTIONS
- Student repays the funds in full within 45 days
of notification.
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Student is referred to the Department of Education for collections
after the District notifies the student of overpayment and
affords the student 45 days to repay overpayment in full
or sets up a repayment schedule.
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The District must return its share of unearned Title IV Funds
no later than 30 days after it determines that the student
withdrew.
- The District
has the option to bill the student for the Institution’s
share of Title IV overpayment.
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IMPACT
The District must bill and collect the overpayment within 45 days.
If the student does not adhere to the repayment plan, the Financial
Aid Office must be notified and the student must be referred to
the Department of Education for collection. The District must bill
and attempt to collect the overpayment from the student within
45 days of notification. The District has no further collection
obligation after 45 days has expired.
Students will incur an additional liability if they are billed
for the institutional share of Title IV overpayments. Students
will have an institutional liability that will prevent them from
enrolling, per Board Policy, until the funds are repaid.
Last Modified: 2008-04-18 .
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