Return of Title IV Funds Policy
When a student applies for federal financial aid, a statement is signed that funds will be used for educational purposes only. Therefore, in accordance with CRF §668.22, if a student withdraws prior to completion of payment period or period of enrollment, a portion of the funds received may have to be returned. The School will calculate the amount of tuition to be returned to the Title IV, HEA Federal Fund Programs according to the policies listed below.
Repayment of Title IV funds will be required when aid has been disbursed to a student from financial aid funds in excess of the amount of aid the student earned during the term. Title IV funds refers to the federal financial aid programs authorized under the Higher Education Act of 1965, as amended and includes the following programs at HCHS: Federal Pell Grant and Federal Direct Loan Program. These policies are effective only if the student completely terminates their enrollment by official withdrawal, is dismissed from classes, stops attending classes without an official withdrawal before completing more than 60% of the enrollment period or fails all courses at the end of the semester.
Withdrawal from Program
In the case of a program that is measured in credit hours, if the student does not complete all the days in the payment period or period of enrollment that the student was scheduled to complete, the student is considered to have withdrawn.
If a student ceases attendance (drops or withdraws) from all his or her title IV eligible courses in a payment period or period of enrollment, the student must be considered withdrawn for title IV purposes.
The school will determine the date of students’ withdrawal based on the following criteria:
- The date the student began the official withdrawal process.
- The student’s last date of attendance at an academically related activity.
- The midpoint of the payment period or enrollment period for a student that leaves without notifying the school.
Calculation for Percent of Earned/Unearned and Amount of Aid to be Disbursed or Returned
Percentage of Earned/Unearned Aid
Earned aid is calculated by dividing the calendar days completed in the period by the total calendar days in the period (excluding scheduled breaks of five days or more and days that the student was on an approved leave of absence), multiple by 100 and round to nearest tenth. (I.e. 70 days completed/120 total days in the period = 0.58333, 0.5833x100 = 58.3 %)
Unearned aid is equal to 100 % minus percent of earned aid.
Amount to be Disbursed or Returned
Amount of student aid earned will be determined by multiplying the total aid disbursed plus aid that could have been disbursed by percent earned. (If earned percentage is greater than 60 %, the student earns 100 %.)
- If amount of Title IV aid earned is less than the total Title IV aid disbursed, return of Title IV funds is required.
- If amount of Title IV aid earned is greater than the total Title IV aid disbursed, a post withdrawal disbursement is be required.
- If amounts are equal, no action is necessary.
The amount of Title IV, HEA aid earned is based on the amount of time a student spent in academic attendance, and the total aid received; it has no relationship to student’s incurred institutional charges. Because these requirements deal only with Title IV, HEA funds, the order of return of unearned funds do not include funds from sources other than the Title IV, HEA programs.
Order of Return
The School is authorized to return any excess funds after applying them to current outstanding Cost of Attendance (COA) charges. A copy of the Institutional R2T4 work sheet performed on your behalf is available through the office upon student request.
In accordance with Federal regulations, when Title IV, HEA financial aid is involved, the calculated amount of the R2T4 Funds is allocated in the following order:
- Unsubsidized Direct Stafford loans (other than PLUS loans)
- Subsidized Direct Stafford loans
- Direct PLUS loans
- Federal Pell Grants for which a Return is required
- The Student
Post Withdrawal Disbursement
If the student did not receive all of the funds that were earned, the student may be due a post-withdraw disbursement. The School may use a portion or all of the students post withdrawal disbursement for tuition and fees (as contracted with the School). For all other school charges, the School needs the student’s permission to use the post withdrawal disbursement. If the student does not give permission, he/she 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 his/her debt at the school.
The post withdrawal disbursement must be applied to outstanding institutional charges before being paid directly to the student.
The School’s responsibilities in regards to Title IV, HEA funds are as follows:
- Providing students with information in this policy
- Identifying students who are affected by this policy and completing the return of Title IV funds calculation for those students
- Returning any Title IV, HEA funds due to the correct Title IV programs
The responsibility for returning unearned aid is allocated between the college and the student. The allocation is calculated according to the portion of disbursed aid that could have been used to cover institutional charges and the portion that could have been disbursed directly to the student once institutional charges were covered. HCHS will distribute the institutional portion of the unearned aid back to the Title IV programs as specified by law. This amount will be charged back to the student’s account. The student will be notified of their portion due back to the various aid programs. The student will also be notified of any balance due the college, which must be taken care of immediately to avoid collection action. HCHS will notify the Department of Education and/or the student’s lender of all amounts due from the student.
The institution has 45 days from the date that the institution determines that the student withdrew to return all unearned funds for which it is responsible. In the case of PLUS loans, the school is required to notify the parent or student of an offer of the post withdrawal disbursement that is not credited to the student’s account within 30 days of the date of determination. The parent or student has 14 days from the date of notification to respond.
The institution is not always required to return all of the excess funds; there are situations once the R2T4 calculations have been completed in which the student must return the unearned aid.
Student Responsibilities in regards to return of Title IV, HEA funds
- Any notification of withdraw should be in writing and addressed to the appropriate institutional official.
- A student may rescind his or her notification of intent to withdraw. Submissions of intent to rescind a withdraw notice must be filed in writing.
- Either these notifications, to withdraw or rescind to withdraw must be made to the official records/registration personal at your school.
- Any funds that were dispersed to the student in which the student was determined to be ineligible for via the R2T4 calculation.
- It will be the student’s responsibility to make arrangements for repayment with the Department of Education and/or the holder of their student loan. Non-compliance on the student’s part will result in the student being ineligible to receive future Title IV assistance.
The School will issue a grant overpayment notice to the student within 30 days from the date the school’s determination that student withdrew and the student MUST either:
- Repay the overpayment in full to Huntington College of Health Sciences
- Sign a repayment agreement with the U.S. Department of Education.
Student is not required to return the overpayment if this amount is equal to or less than 50% of the total grant assistance that was disbursed /or could have been disbursed. The student is also not required to return an overpayment if the amount is $50 or less.
Refund vs. Return to Title IV
The requirements for the Title IV, HEA program funds when a student withdraws are separate from any refund policy that the School may have for credit balances on student accounts. 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, HEA program funds that they were required to return on his/her behalf.