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
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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.