Title IV Federal Student Aid Refund Policy
All colleges and universities that accept Title IV federal student aid are subject to regulations that include refund policy provisions. The regulations are based on 34 CFR, Section 668.22 of Title IV of the Higher Education Act of 1965 and its amendments. Specifically, refunds are addressed in sections 3.2 and 10.3. Understand these refund requirements before you decide on withdrawing from courses funded by a Title IV federal student aid program so you can avoid owing money back to your college.
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The 60 Percent Rule
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If you are accepting Title IV federal student aid, note whether course withdrawals can subject you to a credit owed back to your university. If your courses were funded by a Title IV federal student aid program, the Title IV federal student aid refund provisions require the colleges to refund student aid back to the appropriate Title IV program if the student withdrew during a semester without completing at least 60 percent of the coursework before official or unofficial withdrawal.
Regulatory Requirements
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The refund of a portion of Title IV federal student aid only affects students who received financial aid and withdrew from one or more of the courses before they completed 60 percent of the classwork required. According to the Haverford College website, refunds may also apply to students who drop out, are dismissed or take a leave of absence. The Department of Education website states that if you withdraw from a course funded by a Title IV program, the college must provide you with the details of all refund policies that apply to you and the school. The college, states Haverford College, must refund the unused financial aid to the appropriate Title IV program within 30 days of the date of the student's withdrawal determination.
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Title IV Student Aid Programs
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Title IV includes several programs subject to refund regulations, according to the Purchase College website. These include the ACG grants, Parent (PLUS) Loan, Pell Grants, and the Perkins Loan, SMART Grants, Subsidized and Unsubsidized Stafford Loans and Supplemental Education Opportunity Grants.
Percentage of Earned Aid
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In cases of failure to complete the term, a recalculation determines whether the minimum 60 percent of the term was earned by the student. The Haverford College website states that colleges must calculate the number of days completed prior to the withdrawal date. This is divided by the total days in the term that were funded. Breaks of more than four days do not count as days in the term. If, after recalculation, you earned less aid than was disbursed, the college and you must both return a portion of the funds. In this situation, the student may owe a debit balance to the college after withdrawal.
Future Financial Aid
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If you hope to get federal financial aid in the future, you must repay all previous refunds that resulted in your owing money back to your college. Until these are paid in full, you are not eligible for more financial aid through a Title IV federal aid program.
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