Return of Title IV Funds

Title IV Refund Policy

The Financial Aid Office is required by federal statute to recalculate federal financial aid eligibility

for students who withdraw, drop out, are dismissed, or take a leave of absence. Prior to completing

60% of a payment period or term, the federal Title IV financial aid programs must be recalculated in

these situations.

 

If a student leaves the institution prior to completing 60% of a payment period or term, the financial

aid office recalculates eligibility for Title IV funds. Recalculation is based on the percentage of

earned aid using the following Federal Return of Title IV funds formula: Percentage of payment

period or term completed = the number of days completed up to the withdrawal date divided by the

total days in the payment period or term. (Any break of five days or more is not counted as part of

the days in the term.) This percentage is also the percentage of earned aid.

 

Unofficial Withdrawals

If a student does not officially withdraw from all classes but fails to earn a passing grade in at least

one course, federal aid regulations require that we assume the student has “unofficially withdrawn,”

unless it can be documented that the student completed the enrollment period. Unofficial withdrawals

require a Title IV refund calculation at the midpoint of the enrollment period. The reduction of

federal aid may create a balance due to Saddleback College that must be repaid.

 

Title IV Refund Process

Funds are returned to the appropriate federal program based on the percentage of unearned aid using

the following formula: Aid to be returned = (100% of the aid that could be disbursed minus the

percentage of earned aid) multiplied by the total amount of aid that could have been disbursed during

the payment period or term.

 

If a student earned less aid than was disbursed, the institution would be required to return a portion of

the funds and the student would be required to return a portion of the funds. Keep in mind that when

Title IV funds are returned, the student borrower may owe a debit balance to the institution.

If a student earned more aid than was disbursed to him/her, the institution would owe the student a

post-withdrawal disbursement which must be paid within 180 days of the student's withdrawal. The

institution must return the amount of Title IV funds for which it is responsible no later than 45 days

after the date of the determination of the date of the student’s withdrawal.

 

Refunds are allocated in the following order:

• Unsubsidized Direct Stafford Loans

• Subsidized Direct Stafford Loans

• Direct PLUS Loans

• Federal Pell Grants for which a Return of funds is required

• All other Federal Grants for which a Return of funds is required

 

Title IV Refund Repayment Policy

A bill will be sent with the amount due. You will not be eligible for further student financial aid

funds until the overpayment is paid in full. In addition, your school records will be placed on

“HOLD.” You will not be able to register for classes or request academic transcripts until this bill has

been paid in full.

 

If you do not pay this bill or make payment arrangements, your overpayment will be reported to the

National Student Loan Data System. NSLDS notifies all other colleges and universities that you now

owe money. You will be ineligible to receive further financial aid, at any college. The NSLDS

notification will be removed when your bill is paid in full.

 

If you continue to ignore this bill, your account will be turned over to the Department of Education

for all future collection. The department of Education has the ability to garnish your wages, withhold

your tax refunds, send your account to a collection agency, and take you to court to recover the

money owed.

 

You must pay this bill in full within 45 days.