Federal Return Calculation
A Return of Title IV Funds calculation is completed for students who receive Title IV funds or parent PLUS loans and who withdraw on or before the 60 percent point in time of the enrollment period for which they were charged. Up through the 60 percent point in each payment period, a pro rata schedule is used to determine the amount of Title IV funds the student has earned at the time of withdrawal. After the 60% point in the payment period, a student has earned 100 percent of the Title IV funds. The percentage of Title IV program assistance earned is determined by the calendar days completed in the payment period divided by the total calendar days in the payment period (excluding scheduled breaks of 5 days or more). The amount of Title IV program assistance earned has no relationship to the student's incurred institutional charges.
If a recipient of Title IV grant or loan funds withdraws from school after beginning attendance, the amount of Title IV grant or loan assistance earned by the student must be determined. If the amount disbursed to the student is greater than the amount the student earned, unearned funds must be returned. If the amount disbursed to the student is less than the amount the student earned, and for which the student is otherwise eligible, he or she may be eligible to receive a post-withdrawal disbursement of the earned aid that was not received.
Title IV funds are awarded to a student under the assumption that the student will attend school for the entire period for which the assistance is awarded. When a student withdraws, the student may no longer be eligible for the full amount of Title IV funds that the student was originally scheduled to receive.
Once the Percentage of Title IV aid earned is determined, the amount should be multiplied by the total of Title IV program aid disbursed plus the Title IV aid that could have been disbursed for the payment period. This amount is the Title IV Aid Earned by the Student. If the student receives more Title IV aid than the amount earned, the school, the student, or both must return the unearned funds in a specific order.
The amount of Title IV aid to be returned is determined by subtracting the amount of earned Title IV aid from the amount of Title IV aid that was actually disbursed to the student, not including aid that could have been disbursed. The Title IV aid to be returned must be returned to the appropriate sources in the specific order of priority prescribed in the law and regulations. Any federal unearned aid must be returned to the appropriate sources in the following order, up to the net amount disbursed from each source:
- Unsubsidized Federal Stafford Loan
- Subsidized Federal Stafford Loan
- Federal Perkins Loan
- Federal PLUS Loan
- Pell Grant for which a return of funds is required
- Academic Competitiveness Grant for which a return of funds is required
- National SMART Grant for which a return of funds is required
- Federal Supplemental Educational Opportunity Grants (FSEOG) for which a return of funds is required
The school will return any unearned aid for which the school is responsible for returning. The student (or parent for PLUS loan) must return unearned aid for which the student is responsible. The total amount of unearned Title IV aid minus the unearned amount that the school is responsible for returning equals the amount that the student (or parent for a PLUS loan) must return. The amount the student is responsible for returning must be returned to the appropriate sources in the same order as listed previously. Loan amounts are returned in accordance with the terms of the promissory note.