Withdrawals and Repayment of Title IV Funds
Federal regulations require institutions to calculate the amount of federal financial aid a student earned if a student withdraws from all of their coursework in any given semester/term. In addition, at the end of a semester/term, if a student has not successfully completed any coursework, the institution must confirm that the student did attend the courses for which the student received financial aid.
When a student who receives a net disbursement of Title IV funds ceases attendance prior to the 60 percent point in the payment period, CF will determine whether the student must repay a portion of the net disbursement. A statutory prorated 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 from the calculation.
If a student withdraws after completing more than 60 percent of the semester/term, it is assumed that the student's educational 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 (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 or 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 nonpayment 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 Loan
Subsidized Federal Direct Loan
Federal Direct PLUS Loan
Remaining funds. 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
Academic Competitiveness Grant
Federal Supplemental Educational Opportunity Grant
Other Title IV assistance
Detailed information on repayments is available in the Office of Financial Aid.
These policies are subject to change by action of the United States Department of Education.