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
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.
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one course, federal aid regulations require that we assume the student has “unofficially withdrawn,”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
You must pay this bill in full within 45 days.