|Applies to:||Original Policy Date:||Date of Last Review:||Approved by:|
|Students and Financial Aid Staff||July 1, 2014||August 2022||Ryan Petersen|
Policy Owner: Office of Financial Aid
This policy establishes process and responsibilities for return of Title IV financial aid in accordance with 34 CFR § 668.22.
This policy applies to any student who withdraws from all courses after the last day to withdraw with a full tuition refund OR any student who is considered to have unofficially withdrawn from all courses, and employees whose work relates to financial aid and/or student withdrawal or return of Title IV calculations.
When a student withdraws during a term, either officially or unofficially, the amount of Title IV program assistance the student has earned up to that point is determined by a specific formula. If the student received (or the school or parent received on the student’s behalf) less assistance than the amount the student earned, the student may be eligible to receive those additional funds. If the student received more assistance than earned, the excess funds must be returned by Florida Tech and/or the student.
Return Of Title IV Funds Calculation
The university is required to return the amount of Title IV aid that is considered unearned, and to calculate this, it will first determine the amount of aid the student earned. The amount of assistance that the student has earned is determined on a pro-rata basis. For example, if the student completed 30% of the payment period or period of enrollment, 30% of the assistance the student was originally scheduled to receive is earned. Once the student has completed more than 60% of the payment period or period of enrollment, all the assistance that the student was scheduled to receive for that period is earned; therefore, no aid is returned.
If the student receives (or the school or parent receives on the student’s behalf) excess Title IV program funds that must be returned, the school must return a portion of the excess equal to the lesser of:
- The student’s institutional charges multiplied by the unearned percentage of funds, or
- The entire amount of excess funds (i.e. Title IV funds times earned aid percentage).
The school must return this amount even if it didn’t keep this amount of the student’s Title IV program funds.
Unofficial withdrawals are determined within 30 days of the end of term, and the return to Title IV calculation within 45 days of the end of the term.
The requirements for Title IV program funds when the student withdraws are separate from the university’s refund policy; therefore, the student may still owe funds to the school to cover unpaid institutional charges. The school may also charge the student for any Title IV program funds that the school was required to return. Refer to the refund policy and the withdrawal policy for details.
How Funds Are Returned
The school will return the Title IV aid to the Department of Education electronically. Funds will be returned in the following order until the full amount of unearned aid has been returned: Unsubsidized Stafford Loan, Subsidized Stafford Loan, Direct Graduate Plus Loan, Direct Parent Plus Loan, Federal Pell Grant, Federal Supplemental Educational Opportunity Grant.
Once the funds are returned, the student will be responsible for any balance on their account that is created by the return of Title IV funds. If a credit is created by a combination of a tuition refund and Title IV return, the funds will be refunded to the student via check or direct deposit. Once the return is completed, the student will receive an email notifying them of the action and returned amounts.
In some cases, schools may not be required to return all of a student’s unearned aid. In these cases, the student will be responsible for repayment of the remaining unearned aid according to the terms of the borrower’s promissory note.
For any loan funds that the student must return, the student (or parent for a Direct PLUS Loan) repays in accordance with the terms of the promissory note. That is, the student makes scheduled payments to the holder of the loan over a period of time. Any amount of unearned grant funds that the student must return is called an overpayment. The maximum amount of a grant overpayment that the student must repay is half of the grant funds the student received or were scheduled to receive. The student does not have to repay a grant overpayment if the original amount of the overpayment is $50 or less. The student must make arrangements with the school or the Department of Education to return the unearned grant funds.
In the unlikely event that the student did not receive all of the funds earned, the student may be due a post-withdrawal disbursement. If the post-withdrawal disbursement includes loan funds, the school must get student permission before it can disburse them. The student may choose to decline some or all of the loan funds to avoid incurring additional debt. The school may automatically use all or a portion of the post-withdrawal disbursement of grant funds for tuition, fees, and housing and meal charges (as contracted with the school). The school needs student permission to use the post-withdrawal grant disbursement for all other institutional charges. If the student does not give permission, the student will be offered the funds. However, it may be in the student’s best interest to allow the school to keep the funds to reduce the student’s debt at the school.
There are some Title IV funds that the student was scheduled to receive that cannot be disbursed once the student withdraws because of other eligibility requirements.
Aid will be returned as soon as possible, but no later than 45 days after the date the school determined that the student withdrew. In cases where a student is entitled to a post-withdrawal disbursement, the Financial Aid Office will email a notice of the post-withdrawal disbursement offer no later than 30 calendar days after the date the school determined the student withdrew. Students must respond within 14 days if they wish to accept the post-withdrawal disbursement.
Unofficial withdrawals are processed at time of notification or after grades post. If a student failed all courses in the semester or term, the Financial Aid Office will determine their last date of academic activity oand, if unable to do so, use the mid-point of the term or semester as the withdrawal date.
Withdrawal: For purposes of this policy, a student is considered to have withdrawn if the student ceases to be enrolled in all courses in a given term or semester (also referred to as payment period or period of enrollment).
Unofficial Withdrawal: A student is considered to have unofficially withdrawn if the student ceases to attend and does not provide notification to the school.
Title IV Aid:
The 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)
34 CFR § 668.22
The Registrar’s Office is responsible for entering official withdrawal information in the system of record.
The Office of Financial aid is responsible for reviewing the system of record no less than monthly to identify students who have withdrawn from all of courses prior to the close of the term and perform Title IV calculations for students who received Title IV Aid.
Failing to comply with regulations to properly return unearned title IV funds appropriately could result in additional oversight from the Department of Education, restrictions on Title IV Participation and/or administrative fines for Florida Institute of Technology.
Employees who fail to comply with this policy may face disciplinary action.