Refund policy for Title IV students
The following policy became effective October 7, 2000: “Return of Title IV Funds” requires that all
Title IV recipients who totally withdraw from classes before the 60% point of the semester go through a refund calculation. The portion of Title IV aid that has not been earned must be returned to the appropriate federal programs. The amount of Title IV grant and loan assistance not earned by the student is calculated by determining the complement of the percentage of assistance the student earned and applying it to the total amount of grant and loan assistance that was disbursed (and that could have been disbursed) to the student, or on the student’s behalf, for the payment period or period of enrollment as of the day the student withdrew.
The following example explains the process. A student repays the calculated amount attributable to a Title IV loan program according to the loan’s terms. A student repays a Title IV grant program subject to repayment arrangements satisfactory to the school or the Secretary of Education’s overpayment collection procedures. A student will only be required to repay 50% of the grant assistance that is found to be owed in the refund calculation.
Institutional charges: $1,000
Title IV loans: $2,000
Title IV grants: $1,000
TotalTitle IV aid: $3,000
Title IV aid to school: $1,000
Title IV aid to student: $2,000
Length of payment period: 80 days
Student withdrew on: 20th day
Percent earned: 20/80=25.0%
Percent unearned: 100-25.0=75.0%
Amount unearned: 75.0% x $3,000=$2,250
Institutional responsibility:
Lesser of $1,000 x 75.0% = $750 --or--
Amount unearned = $2,250
Institutional responsibility: $750
School returns to lender: $750
Student’s remaining debt: $1,250
School returns to grant account: $0
Student’s responsibility:
Amount unearned minus school responsibility: $2,250 - $750 = $1,500 (same as 75.0% unearnedx $2,000 to student). Student’s loan responsibility: $2,000 - $750 = $1,250. Student’s grant responsibility: $250 (total responsibility - responsibility for loans). Grant overpayment = $125 ($250 divided in half).
