Financial Aid Refunds & Repayments

Return of Title IV Funds

Federal regulations require Title IV (federal) financial aid funds to be awarded under the assumption that a student will attend the institution for the entire payment period (term) in which federal assistance was awarded.  The regulation requires that when a student withdraws and/or fails all courses for any reason, including medical withdrawals, the student may no longer be eligible for the full amount of Title IV funds (including but not limited to Stafford Loans, Pell grants and FSEOG grants) that he or she was originally awarded or scheduled to receive. The return of funds calculation is based upon the premise that students earn their scheduled aid in proportion to the amount of time in which they are actually enrolled and attending a course.

• Any federal financial aid that a student receives will be considered to have been “earned” as long as attend and participate in all classes enrolled in for more than 60% of the term.
• If a student withdraws from the college before more than 60% of the term is completed, a pro-rated schedule is used to determine the amount of “unearned” federal student aid funds a student is required to repay.
• Withdrawal date is defined as the effective date on which the student officially notifies the school of withdrawal, the last date of class attendance or academically related activity, or the midpoint of the semester if the student leaves without officially withdrawing. Students who receive all “F” grades at the end of semester are subject to review for return of federal funds. Instructors are required to report a student’s last date of attendance or academically related activity when recording a grade of “F”.
• If a student receives all F grades for a term (including unearned F’s) or stops attending before completing the term, a pro-rated schedule using the student’s last date of attendance will be used to determine the amount of “unearned” federal student aid funds a student is required to repay.
• If the student has received financial aid and failed to begin attendance in a class, they are considered a “no show” and therefore have not established eligibility for any financial aid. No show students must repay in full any funds received.
• Students using any Title IV funding in any amount will be reviewed to determine how much of the applicable funding in their award they have earned. The only exception to this are students solely using Federal Work Study without any other Title IV funds. The funding offered that is subject to review under the return of Title IV Funds regulations include:
  • Federal Stafford Loans (Unsubsidized and Subsidized)
  • Federal PLUS Loans
  • Pell Grants
  • FSEOG Grants
• The student will be billed for the amount to be repaid according to the above outlined financial aid regulations. These regulations must be enforced at every college; not just Mid-State. A Student must be reported to the Department of Education if Pell overpayments have not been repaid within 45 days prohibiting the student from receiving any financial aid nationally. If a student owes a repayment of funds to Mid-State their student records will be placed on hold prohibiting a student's receipt of any further financial aid funds, and any Mid-State student registration, grades, and/or transcripts.

The percentage of earned aid is determined by dividing the number of completed calendar days by the number of calendar days in the semester, including weekends and holidays and excluding any scheduled breaks longer than five days. A student completing 60% of the enrollment period will earn 100% of their financial aid and no R2T4 is required. The amount of Title IV funds the student has not earned is calculated by subtracting the amount of Title IV funds the student earned from the total Title IV funding disbursed. Unearned Title IV funds must be returned to the applicable Title IV program within 45 days of the date of determination of the student’s withdrawal. Unearned funds are returned to the Title IV programs within 45 days of the date of determination of the student’s withdrawal by the Financial Aid Assistant.

Unearned Title IV funds are returned to the Title IV programs in the following order:

• Unsubsidized Federal Direct Loans (other than Direct PLUS loans)
• Subsidized Federal Direct Loans 
• Federal PLUS Loans (parent or graduate) 
• Federal Pell Grants for which a return of Title IV funds is required 
• 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

Post-Withdrawal Disbursements

Policies

If an amount of Title IV aid a student has earned is greater than the amount of Title IV aid that has been disbursed, the difference is treated as a post-withdrawal disbursement to the student. Any post-withdrawal disbursement must be made within 180 days of the date the institution determines that the student withdrew. A Post-Withdrawal Disbursement of grant funds must be disbursed within 45 days of the date of the school’s determination that the student has withdrawn.  A Post-Withdrawal Disbursement of loan funds must be offered to the student within 30 days of the date of the school’s determination that the student has withdrawn. A student is allowed 14 days to respond to accept or decline funds. The disbursement of requested funds must be made no later than 180 days. All Post-Withdrawal Disbursements are applied to the student account first, and any resulting credit balance will be disbursed to the student as soon as possible and no later than 14 days from the date of disbursement.

Procedures

If a student has undisbursed aid for which all requirements have been satisfied, a Return to Title IV calculation must be performed to ensure that funds for which a student was eligible and had earned at the time of withdrawal but had not been disbursed are offered as a post-withdrawal disbursement. The institution must disburse any amount of a post-withdrawal disbursement of grant funds that is not credited to the student’s account as soon as possible but no later than 180 days after the date it is determined the student withdrew. A post-withdrawal disbursement of Title IV funds does not require permission from the student. A post-withdrawal disbursement must be made from available grant funds before available loan funds. The student’s authorization must be obtained before crediting the student’s account with loan funds or to cover a balance other than current charges.

Student enrolled in a program offered in modules: A statement of intent to return to a module that begins later in the same payment period or period of enrollment is sent to a student as close to the date that the student ceases attendance at any point prior to completing the payment period or period of enrollment and before the school is required to return Title IV funds, offer any post-withdrawal disbursement of loan funds, or take any other action under the R2T4 requirements For students enrolled in standard and nonstandard-term programs, the later module must begin no later than 45 calendar days after the end of the module the student ceased attending.

Withdrawal exemptions for programs offered in modules

1. A student is not considered to have withdrawn if the student successfully completes one module that includes 49 percent or more of the number of days in the payment period, excluding scheduled breaks of five or more consecutive days and all days between modules
2. A student is not considered to have withdrawn if the student successfully completes a combination of modules that cumulatively contain 49 percent or more of the number of days in the payment period, excluding scheduled breaks of five or more consecutive days and all days between modules
3. A student is not considered to have withdrawn if the student successfully completes coursework equal to or greater than the coursework required for the institution’s definition of a half-time student for the payment period.

The institution uses a Census Date for Pell adjustments and does not use a Freeze Date for R2T4 recalculation in Module courses.

Student’s Responsibility/Notification to Student

The amount of aid a student earns is proportional with the amount of time a student attended class(es) to the total days in the semester. Failure to attend any classes would mean a 100% return of all aid. Mid-State is also required to repay to the federal aid funds a proportional part of the student tuition that was originally paid with federal aid. The student is required to repay these funds to Mid-State Technical College. Any return of tuition will go to the following funds in priority order: (1) Federal Direct Loan (unsubsidized), (2) Federal Direct Loan (subsidized), (3) PLUS Loan, (4) PELL Grant, (5) SEOG Grant, (6) TIP Grant. When aid is returned, the student will owe a balance to Mid-State. Payments should be made via Self-Service or in any Student Services Center. Students who do not repay a debt as a result of this calculation may be reported to the Department of Education and may be prohibited from receiving Title IV funds at other colleges. A hold will be placed on the students account preventing them from obtaining an academic transcript or registering for future terms until the debt is paid.

A student is responsible for all unearned Title IV aid that the school is not required to return. The initial amount of unearned Title IV aid due from the student (or parent, for Direct PLUS Loan funds) is determined by subtracting the amount returned by the school from the total amount of unearned Title IV funds to be returned. This is called the initial amount due from the student because a student does not have to immediately return loan funds or the full amount of any grant repayment due. Therefore, the student may not have to return the full initial amount due.

A student loans that remain outstanding consist of the loans disbursed to the student minus any loans the school repaid. These outstanding loans are repaid by the student according to the terms of the student’s promissory note(s).

The regulations limit the amount a student must repay to the amount by which the original overpayment amount exceeds 50% of the total grant funds disbursed to or that could have been disbursed to the student for the payment period or period of enrollment.

Consult with Financial Aid Staff prior to withdrawal to discuss your individual situation.