Financial Aid : Return of Title IV Funds
Return of Title IV Funds When a Student Withdraws
Students receiving financial aid who withdraw or stop attending will, in most cases, be required to return a portion of the financial aid received. The Higher Education Act, as reauthorized and signed into law on October 7, 1998, established the Return to Title IV Funds Policy. In addition, the Virginia Community College System now requires colleges to calculate R2T4 school repayments for students who receive certain state funds. This went into effect July 1, 2009.
The concept behind the policy is that the college and the student are allowed to retain only the amount of federal/state aid that is earned. If a student withdraws or stops attending classes, a portion of the aid received is considered to be unearned and must be returned to the aid programs from which it was received. For this policy, the last date of attendance is one of the following: the date the formal withdrawal process begins, the date the student otherwise gives official notice of intent to withdraw (i.e., letter, phone call, e-mail, in-person), the mid-point of the term, or the last documented date of attendance in an academically-related activity (i.e., documented attendance in a class or lab or submission of an assignment in a video course). If a student attends through 60% of the term, all federal/state aid is considered earned.
The federal/state programs that are covered by this policy are Unsubsidized Federal Stafford Loans, Subsidized Federal Stafford Loans, Federal PLUS Loans, Federal Pell Grants, Federal Academic Competitiveness Grants (ACG), Federal Supplemental Opportunity Grants (SEOG), Commonwealth Grants and VGAP Grants, and in some cases, other state aid grants, GEAR UP Grants and SSS Grants to students.
When a financial aid recipient of federal and/or state aid withdraws or stops attending classes during an enrollment period, the amount of financial aid earned is determined by a specific formula that uses the first day of class through the last day of exams and the student’s reported last day of attendance. If a student received less assistance than the amount earned, that student may be entitled to receive additional aid. If a student received more assistance than earned, the excess funds must be returned by the College as determined by the calculation. The amount of assistance earned is determined on a pro rata basis.
For example, if a student completed 30% of the enrollment period, the student will have earned 30% of the aid he/she was originally scheduled to receive. Once a student completes more than 60% of the enrollment period, the student has earned all of the aid that he/she was scheduled to receive for that time period. If a student does not receive all of the aid that was earned, the student may be due a post-withdrawal disbursement. The College may automatically apply all or a portion of the student’s post-withdrawal disbursement to outstanding charges for tuition and fees.
Once the College determines the dollar amounts and which individual aid programs must be repaid, the student will be notified of any amounts he/she owes. Any amount of unearned grant funds that a student must return is called an overpayment. Students must make arrangements to return the unearned grant funds. Funds that must be returned by the student to the loan programs can be paid in full in accordance with normal loan repayment terms. Unpaid balances will be reported to the National Student Loan Data System (NSLDS) and turned over to the Department of Education for collection. Until overpayments are repaid or satisfactory arrangements to repay have been made, students will be ineligible for further federal/state aid at any institution.
Before withdrawing or stopping attendance in classes, the student should be aware of the proper procedure for withdrawing from classes and the consequences of either withdrawing or stopping attendance. Official withdrawal is always the responsibility of the student and questions regarding withdrawal should be addressed to the student’s advisor or the Registrar’s Office.
The requirements for federal/state program funds are separate from the College refund policy.Print Page