Refunds & Repayments for Title IV Financial Aid Recipients
When a student who receives a net disbursement of Title IV funds ceases attendance prior to the 60% point in the payment period (semester), CF will determine whether the student must repay a portion of the net disbursement. A statutory pro-rata schedule will be used to determine the percentage of Title IV funds the student has earned at the time of withdrawal. Federal Work Study funds are excluded in the calculation.
If a student withdraws after completing at least 60% of the term it is assumed that the student’s living expenses up to the time of withdrawal exceeded the amount of the funds disbursed and the student does not owe a repayment. However, if the disbursement was greater than the student’s expenses up to the withdrawal date, the student must repay the excess amount or a portion of the excess amount as applicable.
The percentage formula is: Total number of calendar days completed in the payment period divided by the total number of calendar days in the payment period equals the percentage of Title IV funds earned.
The institution must return the lesser of the amount of Title IV funds that the student does not earn or the amount of institutional charges (tuition and fees) that the student incurred for the payment period multiplied by the percentage of funds that was not earned. The student will be billed for this amount.
The student (or parent, if a Federal Direct PLUS loan) must return or repay the remaining unearned Title IV program grant or loan funds. The student’s grant repayment is reduced by half when he/she rather than the institution must return grant funds. CF will notify the student in writing of the amount owed, procedure for repayment and consequences of non-payment within the allotted time frame.
Order of return of Title IV funds. Unearned funds returned by the school or student are credited to outstanding Title IV loan balances for the student or made on the student’s behalf. Funds must be credited to outstanding balances in the following order:
- Unsubsidized Federal Direct Stafford Loan
- Subsidized Federal Direct Stafford Loan
- Federal Direct PLUS Loan
If excess funds remain after repaying all outstanding loan amounts, then the remaining amount is credited to grant programs in the following order:
- Federal Pell Grant
- Other Student Financial Aid (SFA) Programs
- Other Federal, State, Private or Institutional Sources of Aid
- The Student (Refund can be paid to the student only if funds remain AFTER the refund has been returned to the SFA programs and other sources in order.)