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Return of Federal Title IV Funds Policy

Purpose

The purposes and intent of this policy are to provide guidance as to how Carroll College will calculate the amount of Federal Title IV funds to be returned for a student who has withdrawn from all classes, inform interested parties of the methods and procedures used to calculate the amount, provide a fair and equitable policy, and provide a policy that conforms to federal regulations and the intent of those regulations.

This policy governs the return of Federal Title IV funds disbursed for a student who completely withdraws from a term, payment period, or period of enrollment. It does not apply to students who have dropped some classes but remain enrolled in other classes at or through Carroll. A student is considered to have withdrawn from a period of enrollment or payment period if they do not complete all the days in the period of enrollment or payment period that they were scheduled to complete. This applies whether or not the period includes modules, and for any program format. The general assumption is that a student earns aid based on the period of time he/she remained enrolled. Institutional aid follows the Business Office tuition refund policy.

The Process—General

  1. Student notifies the Registrar that he/she is withdrawing from the College. The Registrar provides the student with a withdrawal form.
  2. The student follows the instructions on the form to obtain the necessary signatures indicating compliance with requirements, and returns the form to the Registrar.
  3. The Registrar gives a copy of the completed withdrawal form to the Financial Aid Office immediately upon receipt from the student.
  4. The Financial Aid Office calculates the amount of funds to be returned. Any existing credit balance on a student’s account will not be disbursed until after the R2T4 calculation is performed. The result of the R2T4 calculation may result in payment to Carroll College for unpaid institutional charges after the R2T4 or other refund calculations are performed. A student may receive a credit balance within 14 days of the R2T4 calculation.
  5. The Financial Aid Office within 30 days, notifies the student and the Business Office in writing (letter/email) of funds that the College must return, and the amount that the student must return.
  6. The Business Office returns its share of unearned Federal Title IV funds within 45 days after it determines that the student's withdrawal process is complete. The student must repay his/her share either by paying loans in accordance with the terms and conditions of the promissory note or (2) repaying grants directly or under a payment arrangement through the College (not required by the College).

IMPORTANT - MODULES: The rules surrounding withdrawal and modules (example: summer term) are slightly different. Students enrolled in modules are held accountable for attending the number of days in the modules in which they are enrolled. For example, if the student enrolls in modules one and three within a semester, only the days in modules one and three will be considered when calculating the percentage of the semester completed. The timing of a dropped class in the modular programs is also important. If a student drops courses in a later module while still enrolled in a current module within a semester, the student is not considered to be withdrawn. However, a recalculation of financial aid eligibility based on the change in enrollment status (full-time, three-quarter time, half-time) may still be required. If a student ceases enrollment in a current module, but plans to attend a later module within the same semester, the student must notify the Financial Aid Office in writing within 14 days of their plans to attend the later module to avoid being considered a withdraw for the purposes of this calculation. If written notification is not received within the required timeframes, the student is considered to have withdrawn and the return of funds calculation is completed. If, however, the student does continue to attend in a later module within the same semester, even if they failed to notify the Office of Financial Aid that they would, prior calculations due to non-communication are reversed. Exceptions include if the student completes all requirements for graduation before completing the days scheduled to complete in the period or the student completes one or more modules that comprise 49% or more of the number of days in the payment period or at least half-time enrollment.

Note: In addition to calculating a return of Federal Title IV funds for students who notify Carroll of withdrawal, Carroll must also make the calculation for students who do not “officially” withdraw. Return of Title IV Calculations are based on the official and the unofficial last date of attendance as determined by the school. The Financial Aid Office reviews final semester grades to determine students with all “F” and/or "W" grades followed by attempts to determine if the student withdrew from all classes. If so, the last date of academically related attendance is obtained and the later of an "F" or "W" is used. To facilitate the process, faculty instructors are required to indicate last date of attendance for all students awarded an “F” grade. Charges are not adjusted for unofficial withdrawals; therefore, institutional aid is not adjusted. Federal aid is adjusted based on Federal Title IV return of funds calculations.

The Details

Earned aid - During the first 60% of the period, a student “earns” Federal Title IV funds in direct proportion to the length of time he/she remains enrolled. That is, the percentage of time during the period that the student remained enrolled is the percentage of disbursable aid for that period that the student earned. A student who remains enrolled and attending beyond the 60% point earns all aid for the period.

Note that institutional costs play no role in determining the amount of Federal Title IV funds to be retained or returned. Also, aid is “disbursable” if the student could have received it at the point of withdrawal.

Unearned aid—The amount of disbursed Title IV aid that exceeds the amount of Title IV aid earned under the required formula. Unearned Federal Title IV funds, other than Federal Work-Study, must be returned.

Percentage of period enrolled—The number of days the student remained enrolled divided by the number of days the in the period. Calendar days are used, but breaks of at least 5 days are excluded from both the numerator and denominator. The number of days used to determine the enrolled percentage normally includes weekends; however, scheduled breaks are measured from the first day of the break to the next day that classes are held.

Repayment of unearned aid—The responsibility to repay unearned aid is shared by the institution and the student in proportion to the aid each is assumed to possess.

The institution’s share is the lesser of:

  • The total amount of unearned aid; or
  • Institutional charges multiplied by the percentage of aid that was unearned.

The formula assumes that Federal Title IV funds are directly disbursed to a student only after all institutional charges have been covered, and that Title IV funds are the first resource applied to institutional charges. Institutional charges comprise the amounts that had been assessed prior to the student’s withdrawal, not a reduced amount that might result from an institution’s refund policy.

The student’s share is the difference between the total unearned amount and the institution’s share. A school must return Title IV funds to the programs from which the student received aid during the payment period or period of enrollment as applicable, in the following order, up to the net amount disbursed from each source:

  • Federal Direct Unsubsidized Stafford Loans
  • Federal Direct Subsidized Stafford Loans
  • Federal Direct Parent PLUS Loans
  • Federal Pell Grants for which a return of Title IV funds is required and/or adjusted based upon attendance.
    • If a Federal Pell Grant recipient's projected enrollment status changes during a payment period before the student begins attendance in all of his or her classes for that payment period, the institution shall recalculate the student's enrollment status to reflect only those classes for which the student actually began attendance.
  • Iraq and Afghanistan Service Grant, for which a return of Title IV funds is required
  • FSEOG for which a return of Title IV funds is required
  • TEACH Grants for which a return of Title IV funds is required

After the student’s share is fully allocated among the Title IV programs, any amount owed to a grant program is reduced by half. Students return their share of unearned aid attributable to a loan (includes Federal Perkins Loan) under the terms and conditions of the promissory note.

Timeframe for returning funds

The institution must return its share of unearned Federal Title IV funds no later than 45 days after it determines that the student withdrew.

The student must repay his/her share either by (1) paying loans in accordance with the terms and conditions of the promissory note or (2) repaying grants directly or under a payment arrangement through the College (not required by the College) or the Department of Education (pending).

Credit Balances & Late disbursements

A student who earned more aid than was disbursed prior to withdrawal is owed a late disbursement or a post-withdrawal disbursement. Only the difference between earned aid and aid already disbursed may be late disbursed. Thus, conditions under which unearned aid must be returned and conditions under which a late disbursement is required are mutually exclusive.

Any post-withdrawal disbursement due must meet the current required conditions for late disbursements. A school is required to make (or offer as appropriate) post-withdrawal disbursements. A post-withdrawal disbursement must be made within 45 days of the date the institution determines that the student withdrew. The amount of a post-withdrawal disbursement is determined by following the requirements for calculating earned Title IV aid and has no relationship to incurred educational costs. A post-withdrawal disbursement, whether credited to the student’s account or disbursed to the student or parent directly, must be made within 14 days from available grant funds before available loan funds. Available grant or loan funds refers to Title IV program assistance that could have been disbursed to the student but was not disbursed as of the date of the institution’s determination that the student withdrew. A school must notify borrowers within 30 days and give borrowers 14 days to provide confirmation from a student for Subsidized or Unsubsidized Stafford Loans, or parent for a Direct Parent PLUS Loan, before making any disbursement of loan funds from a post-withdrawal disbursement. A school is permitted to credit a student’s account with the post-withdrawal disbursement of Title IV grant funds without the student’s permission for current charges for tuition, fees, and room and board (if the student contracts with the school) up to the amount of outstanding charges.

The institution may credit late disbursements towards unpaid institutional charges. Authorizations for current year charges remain valid for late disbursements; authorizations for prior year charges become invalid.

Withdrawal date (unofficial withdrawal)

For students who withdraw without notifying the institution, the institution must determine the student’s withdrawal date within 30 days after the expiration of the earlier of the:

  • payment period or period of enrollment;
  • academic year in which the student withdrew; or
  • educational program from which the student withdrew.

The withdrawal date for unofficial withdrawals is the midpoint of the applicable period, except:

  • If the student left without notification because of circumstances beyond his/her control, the institution may determine a withdrawal date related to the circumstances. The Financial Aid Director is responsible for making this determination.
  • The institution may, at its option, use the student’s last date of attendance at a documented “academically-related activity” in lieu of any other withdrawal date. “Academically-related activities” include activities confirmed by an employee of the institution, to include exams, tutorials, academic advisement, turning in a class assignment, and attending a study group assigned by the institution. Residing in institution-owned facilities, eating at institution-provided food services, and participating in off-campus study groups not assigned by the institution are not “academically-related activities”.

Withdrawal date (official withdrawal)

The withdrawal date for official withdrawals (student notified the institution the he/she was withdrawing) is the date the student began the institution’s withdrawal process or officially notified the institution of intent to withdraw, except the institution may, at its option, use the student’s last date of attendance at a documented “academically-related activity” in lieu of any other withdrawal date. “Academically-related activities” include activities confirmed by an employee of the institution, to include exams, tutorials, academic advisement, turning in a class assignment, and attending a study group assigned by the institution. Residing in institution-owned facilities, eating at institution-provided food services, and participating in off-campus study groups not assigned by the institution are not “academically-related activities”.

Date of institution’s determination that a student withdrew - For a student who officially withdrew, this date is the later of:

  • The withdrawal; or
  • The date of the student’s notification to the institution.

For a student who unofficially withdrew (withdrew without notifying the institution), this date is the date that the institution becomes aware that the student ceased attendance.

The “date of institution’s determination that a student withdrew” is used for the following purposes:

  • It provides the dividing date between disbursed aid and late disbursements; and
  • It starts the clock for the period of time within which the institution must return federal funds.

Suspension/Withdrawal

If a student is withdrawn based on a school initiated suspension or involuntary withdrawal during a period of enrollment the date used for the withdrawal date is as follows:

  • If the student is given the option to appeal the suspension or involuntary withdrawal and does not appeal within the time frame allowed then the date of the initial suspension letter is used in the calculation; the College may, at its discretion, use the last date of attendance as described above.
  • If the student does not appeal and can attend classes during the appeal process (regardless of whether they attend or not) then the official date on the appeal denial letter from the College will be used for calculations rather than the initial suspension letter date.