Description: Tags: 0708Vol5C2a
Description: Tags: 0708Vol5C2a
WITHDRAWALS
This chapter explains how Federal Student Aid (Title IV) funds are Return of Funds cites
handled when a recipient of those funds ceases to be enrolled prior to the HEA, Section 484B
34 CFR 668.22
end of a payment period or period of enrollment. These requirements
do not apply to a student who does not actually cease attendance at the
school. For example, when a student reduces his or her course load from
12 credits to 9 credits, the reduction represents a change in enrollment The FSA Assessment module
status not a withdrawal. Therefore, no Return calculation is required. that can assist you in understanding
and assessing your compliance with
The Return of Title IV Funds (Return) regulations do not dictate an the provisions of this chapter is “Return
of Title IV Funds,” at
institutional refund policy. Instead, a school is required to determine the
earned and unearned Title IV aid a student has earned as of the date the http://ifap.ed.gov/qahome/
student ceased attendance based on the amount of time the student spent qaassessments/returntivfunds.html
in attendance or, in the case of a clock-hour program, was scheduled to
be in attendance. The calculation of Title IV funds earned by the student
has no relationship to the student’s incurred institutional charges.
For a student who withdraws after the 60% point-in-time, there are
no unearned funds. However, a school must still determine whether the
student is eligible for a post-withdrawal disbursement.
General requirements
Important Title IV funds are awarded to a student under the assumption that
the student will attend school for the entire period for which the assis-
When a student withdraws tance is awarded. When a student withdraws, the student may no longer
before a school’s census date be eligible for the full amount of Title IV funds that the student was
originally scheduled to receive.
A student begins earning Title IV funds on
his or her first day of attendance. There-
fore, even if a student withdraws before a If a recipient of Title IV grant or loan funds withdraws from a school
school’s census date, the school must per- after beginning attendance, the amount of Title IV grant or loan as-
form a Return calculation using the num- sistance earned by the student must be determined. If the amount dis-
ber of days or the number of scheduled
clock hours the student attended class as bursed to the student is greater than the amount the student earned, un-
the numerator in STEP 2, Part H. earned funds must be returned. If the amount disbursed to the student
is less than the amount the student earned, and for which the student is
otherwise eligible, he or she is eligible to receive a post-withdrawal dis-
bursement of the earned aid that was not received.
http://ifap.ed.gov
Access to R2T4 Web Product
via CPS Online The Department has developed a Return of Title IV Aid Web prod-
uct. It is accessible via the main menu of the FAA Access at the CPS
Individual staff members must be enrolled
in the SAIG in order to have access to the Online Web site
Return software.
http://www.fafsa.ed.gov/FOTWWebApp/faa/faa.jsp
Your school’s SAIG Destination Point
Administrator (DPA) can enroll the The use of the Department’s worksheets and the Web Product is
selected staff members via the SAIG
Enrollment Web site at
optional.
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Chapter 2 — Withdrawals and the Return of Title IV Funds
• any refund policy with which the school must comply; A sample summary of the requirements of
34 CFR 668.22 is provided at the end of this
• the requirements for the treatment of Title IV funds when a chapter.
student withdraws; and
• the requirements and procedures for officially withdrawing
from the school.
An institution should provide sufficient information for a student or
prospective student to be able to determine the financial consequences of
withdrawing, and how to officially withdraw. A student should be able to
estimate how much federal student aid he or she will earn if the student
withdraws, and how much he or she may have to return. In addition,
because the Return provisions do not affect institutional refund policies,
the school must provide the student with information on both the fed-
eral student aid requirements and the school’s refund requirements and
explain the interaction between the two. A school should include some
discussion of how it might adjust a student’s charges to take into account
any Return of Title IV funds that the school may be required to make.
Finally, a student or prospective student should be informed that Federal
Student Aid may not cover all unpaid institutional charges due to the in-
stitution upon the student’s withdrawal.
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Verification
The Return calculations impose no additional liability for interim
Withdrawals and verification cite
DCL-GEN-04-03 disbursements made to students selected for verification. However, the
Return requirements do place limits on interim disbursements that can
be made to students selected for verification who have ceased attendance.
A school may not make an interim disbursement to a student after the
student has ceased attendance.
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Chapter 2 — Withdrawals and the Return of Title IV Funds
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Chapter 2 — Withdrawals and the Return of Title IV Funds
1. the school must have a formal written policy regarding leaves Maximum Timeframe or LOA
of absence requiring that all requests for leaves of absence be
When calculating the maximum time
submitted in writing and include the reason for the student’s frame for a student’s approved LOA,
request; the school must ensure that it ac-
counts for all periods of nonattendance
2. the student must follow the school’s policy in requesting the (including weekends and scheduled
LOA; breaks).
3. there must be a reasonable expectation that the student will Thus, since an approved LOA may not
return from the LOA; be more than 180 days, a school might
have to reduce the length of a students
4. the school must approve the student’s request for an LOA in LOA if the 180th day is scheduled to fall
accordance with the school’s policy; on a day the school would be closed.
5. the institution may not assess the student any additional in-
stitutional charges, the student’s need may not increase, and
therefore, the student is not eligible for any additional Federal
Student Aid;
6. the LOA together with any additional leaves of absence must
not exceed a total of 180 days in any 12-month period; Reminder
7. except in a clock-hour or nonterm credit-hour program, a stu-
dent returning from an LOA must resume training at the same
point in the academic program that he or she began the LOA;
and Full tuition credit
8. if the student is a Title IV loan recipient, the school must An institution may grant a full tuition
explain to the student, prior to granting the LOA, the effects credit toward the course the
student chooses to reenter as a way
that the student’s failure to return from an LOA may have on to comply with the requirement that
the student’s loan repayment terms, including the expiration the institution not assess the student
any additional charges upon return
of the student’s grace period. from an approved leave of absence.
A student granted an LOA that meets the criteria in this section is
not considered to have withdrawn, and no Return calculation is required.
Upon the student’s return from the leave, he or she continues to earn the
Federal Student Aid previously awarded for the period.
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A school must publicize its LOA policy. The school may do this by
including that policy in the consumer information the school makes
available to students (see Volume 2 – School Eligibility and Operations).
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Chapter 2 — Withdrawals and the Return of Title IV Funds
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Chapter 2 — Withdrawals and the Return of Title IV Funds
No additional charges
An LOA is a temporary break in the student’s attendance during
which, for purposes of determining whether a Return calculation is re-
quired, the student is considered to be enrolled. Since students who are
continuously enrolled are not assessed additional charges, any additional
charges to a student, even minimal reentry charges, indicate that the in-
stitution does not truly consider the student to be on an approved LOA.
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Institutional charges
Institutional charges are used to determine the portion of unearned
Title IV aid that the school is responsible for returning. Schools must
ensure that all appropriate fees as well as applicable charges for books,
supplies, materials and equipment are included in Step 5, Part G of the
Return calculation (see Example of Determining Institutional Charges). In-
stitutional charges do not affect the amount of Title IV aid that a student
earns when he or she withdraws.
The return regulations presume that Title IV program funds are used
to pay institutional charges ahead of all other sources of aid. Institutional
charges may not be reduced even if other sources of aid are used to pay
those charges. For example, a school may not reduce institutional charges
when an outside agency supplying aid requires that aid to be used for
tuition.
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Chapter 2 — Withdrawals and the Return of Title IV Funds
• all charges for tuition, fees, and room and board (if contracted
with the school) (If an institution enters into a contract with
a third party to provide institutional housing, the institution Reminder
has to include the cost of housing as an institutional charge
in a Return calculation.); and
• expenses for required course materials, if the student does not
have a real and reasonable opportunity to purchase the re-
quired course materials from any place but the school.
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Although the cost of the tools is not listed as a charge in the student’s
enrollment agreement, Aerospace requires that the tools be purchased by ev-
eryone in the program of study. Therefore, as a general rule, the tool charges
would be considered school charges. However, under the exceptions rule, the
tool charges do not have to be considered school charges if Aerospace can
demonstrate that – (1) the tools were available for purchase elsewhere; (2)
Aerospace made financial aid available to students in time to purchase the
tools from another vendor before the first day of class; and (3) Aerospace’s
practices provide students with an equal opportunity to purchase tools from
the campus bookstore or the retailer across the street.
In this case, the school meets the first criterion, the tools are available at the
store across the street, so an opportunity could exist. However, the school fails
to satisfy the second and third criteria because the school’s routine practice of
crediting students’ accounts with all financial aid, and extending lines of credit
for purchases at the campus bookstore, discourages students from purchasing
the required tools from another vendor. Unless a student specifically requests
that Aerospace not hold his or her credit balance, a student whose education
is funded primarily through financial assistance has to purchase the tools at
the campus store. As a result, the cost of the tools must be classified as school
charges.
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Chapter 2 — Withdrawals and the Return of Title IV Funds
You must apply your school refund policy before allocating a Title Of course, in order to determine the correct
Title IV credit balance, the school must take
IV credit balance. However, you are not required to actually complete into account both the results of the Return
the refund process (for example, by making a refund to a student) before calculation and any applicable
completing the steps for allocating the Title IV credit balance. refund policy.
For the treatment of credit balances when a student dies, see the
discussion under Death of a student later in this chapter.
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On September 30, when he has completed 25% of the semester, Legolas informs the school
that he has decided to withdraw in order to pursue his dream of winning a gold medal as an
Olympic archer. NMCC places a hold on Legolas’s account while it performs the required Return
calculation and applies its institutional refund policy.
The school performs the required Return calculation on October 20, and determines that
the Amount of unearned funds due from the school is $375, and that the Initial amount of un-
earned funds due from the student is $1,125. Since the $1,125 is composed entirely of grant
funds, after applying the 50 % grant protection, the Amount for the student to return is a grant
overpayment of $125.00.
Before Legolas withdrew, the Title IV funds on his account totaled $2,000, and $500 of that
$2,000 was used to cover the existing charges. There were no charges due the school, and the
Title IV credit balance was $1,500. After the school returned the $375 it is required to return, the
new total of Title IV funds on the student’s account was $1,625 ($2,000 — $375), and the new
Title IV credit balance was $1,125.
Then, the school applies its institutional refund policy. Under NMCC’s refund policy, a first-
time student who withdraws before the 50% point in the semester is entitled to an 80% refund
of institutional charges. Since Legolas withdrew at the 25% point of the semester, he is entitled
to a refund of 80% of the amount he was charged or $400 ($500 X .80). So, the new institutional
charges on the student’s account are $100, and the new (final) Title IV credit balance is $1,525
($1,625 — $100). Note that this new credit balance is larger than the credit balance that existed
before the student withdrew.
Because Legolas has a Title IV credit balance on his account, NMCC has 14 days from October
20 (the date they performed the Return calculation) to return the student’s grant overpayment
(it can use its own funds or Title IV funds) from the student. After the school returns the $125.00
grant overpayment, the Title IV credit balance of the student’s account is $1,400 ($1,525.00
– $125.00). The school must pay those funds to the student within 14 days of October 20.
Note: With a never before achieved “perfect score,” Legolas won a gold medal in the Olympic
archery competition.
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Chapter 2 — Withdrawals and the Return of Title IV Funds
If an outside entity determines that an institution is required to take Verifying an agency’s position
continuous attendance for a limited period, including for census pur-
poses, then the institution is considered to be one that is required to take Unless an outside entity has determined
that an institution is required to take
attendance for that period of time only. However, if an outside entity attendance, the institution would be
requires attendance taking only for a single day of census activity, ED considered to be one that is not required
would not consider the institution to meet the definition of an institu- to take attendance. If a school is unsure
whether an outside entity requires a school
tion required to take attendance for that one day.
to take attendance, the school should
inquire of the outside entity, and
Institutions that are required to take attendance for a limited period document the agency’s response.
must document a student’s attendance through that period. If an institu-
tion determines that a student was not in attendance at the end of that
period, the student’s withdrawal date would be determined according to
the institution’s attendance records.
Example of taking attendance
If the institution demonstrates that the student attended past the end For example, ten students at Peabody
of the limited period, the student’s withdrawal date is determined in ac- University receive assistance from the state.
cordance with the requirements for an institution that is not required to The state requires the school to take at-
tendance for the recipients of the state’s
take attendance. education benefits. Peabody University is
not required by any other outside entity to
If a school is required by an outside entity (for example, a state take attendance for any of its other
Workforce Development Agency), to take attendance for only some stu- students. Seven of the ten students who
receive state benefits are also Title IV
dents, the school is required to use those attendance records for only the program recipients. If any of those seven
cohort of students under the outside agency’s jurisdiction to determine students withdraw from the school, the
the student’s withdrawal date (the last date of academic attendance). The school must use the state required
school would not be required to take attendance for any of its other stu- attendance records for them to determine
the withdrawal date as required for
dents, or to use attendance records to determine any of its other students’ institutions required to take attendance.
withdrawal dates, unless the school is required to take attendance for For all other Title IV program recipients
those students by another outside entity. at Peabody University who withdraw, the
school must determine the withdrawal
date in accordance with the requirements
for students who withdraw from a school
that is not required to take attendance.
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• withdraw the student and, if the student returns, treat the stu-
dent as a reentry if permitted under the regulations.
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The periods used for transfer and reentry students do not have to
be the same. A school may choose to use payment period for transfer
students and period of enrollment for reentry students.
Payment period
The definition of a payment period is the same definition used for
other Title IV program purposes. This definition is found in
Period of enrollment
Period of enrollment cite A period of enrollment is the academic period established by the
34 CFR 668.22(l)(2) school for which institutional charges are generally assessed (i.e., the
length of the student’s program or the academic year, but consistent
with the period for which loans generally are certified (not to exceed 12
months).
Applicability
The use of payment period or period of enrollment is important for
many aspects of the Return calculation. For example, if a school is de-
termining the treatment of Title IV funds on a payment period basis, the
student’s Title IV program assistance to be used in the calculation is the
aid that is disbursed or that could have been disbursed for the payment
period. Also, the institutional charges used in the calculation generally
have to reflect the charges for the payment period.
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Chapter 2 — Withdrawals and the Return of Title IV Funds
Rounding
Enter dollars and cents using standard rounding rules to round to the
nearest penny. Final repayment amounts that the school and student are
each responsible for returning may be rounded to the nearest dollar.
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The regulations have been revised to reflect the more limited appli-
cability of the Return of Title IV Funds rules as provided in the Higher
Education Reconciliation Act of 2005 (HERA). For students whose
withdrawal date is on or after July 1, 2006, schools should only include
funds from the following programs in their Return calculations:
• Pell Grant,
• ACG,
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Chapter 2 — Withdrawals and the Return of Title IV Funds
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Note: For a student who completed more than 60% of his or her
training before ceasing attendance, the school would not have
returned any Title IV aid. If that student were to reenter train-
ing within 180 days, because the student had received 100%
of his or her aid for the period, the student would not be
eligible to receive additional Title IV aid until he or she com-
pleted the hours (and weeks for a credit-hour- without-terms
program) in that payment period.
This student has returned to school. The regulations (34 CFR 668.4(e))
require that the overpayment referenced herein be voided.
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Chapter 2 — Withdrawals and the Return of Title IV Funds
Assume that this student withdrew from school after completing 200 of the
225 hours he or she was scheduled to complete by that point in the payment
period (50%), and the school uses payment periods to calculate the Return of
Title IV Aid. Under the Return regulations, the school used scheduled hours
(225) to determine that the student earned 50% of his or her Title IV aid. The
school returned $500 to the loan program. The $750 the student was initially
scheduled to return (Step”S”) was eliminated by the application of grant pro-
tection in Step “U.”
If the student returns to the same program at the same school within 180
days of the withdrawal, the student would be considered to be in the same
payment period, and the student’s eligibility for Title IV aid should be the same
as if the student had not left. Thus, assuming that not more than 12 months
has elapsed since the start of the original loan period, the school should re-
quest that the lender redisburse the $500 the school had returned. In addition,
the institution would schedule additional Title IV disbursements for the day af-
ter the student is expected to complete the remainder of the payment period.
If the student withdraws again before completing the payment period, the
institution would apply the provisions of the Return regulations using the total
number of hours the student completed in the numerator, the full 450 hours in
the payment period in the denominator, and then applying that fraction to the
total Title IV aid disbursed for the period.
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https://cod.ed.gov/cod
Limits on requesting log in under the School tab using the school’s user name and password
administrative relief (available from the school’s system administrator), select “Post Deadline
System Processing” on the left side, and request administrative relief
Generally, a school may request with “Reentry within 180 days” as the reason.
administrative relief for a student who
reenters training during the award year
following the award year in which the
For the campus-based programs, if funds are not available from the
funds were originally awarded. year in which the awards were originally made, the school may award
funds from the current year. Note that doing this does not increase the
annual maximum awards that may be made to an individual student.
A school might treat the student as one who withdraws and reenters.
If so, the school must administratively withdraw the student from the
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Chapter 2 — Withdrawals and the Return of Title IV Funds
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LOAN PRINCIPLES
APPLICABLE TO TRANSFER AND REENTRY AT NONTERM SCHOOLS
1. In nonterm programs, all loans are made on the basis of a Borrower–Based Academic Year
(BBAY). For a student who transfers or reenters a program, the loan period certified must
be the lesser of the –
• academic year,
• program, or
• remaining balance of a program of study.
2. A school may not certify or originate a loan for a period that exceeds 12 months.
3. When we say balance, we mean the borrower’s annual loan limit, less any amount
previously borrowed for the same academic year, plus any amount returned per 34 CFR
668.22.
4. For a transfer student, when an overlap exists between —
• the academic years at the original and receiving institutions (If the original aca-
demic year is unknown, a school must assume the previous school had an academic
year of 30 weeks.),
• or the borrower’s original loan period and the borrower’s new period of attendance,
the borrower is eligible to receive a loan for an amount no greater than the balance (if any)
remaining on the previous loan. The borrower is not eligible for a new loan until the
academic year at the receiving school is over.
Note: Since the period of attendance for which the original school previously certified the
transfer student’s loan might have included the dates for which the receiving school is at-
tempting to certify a loan, some guaranty agencies might require clarification from one or
both schools before they will certify the new loan.
If there is no overlap, the borrower is immediately eligible to receive a new loan. The receiv-
ing school can certify the borrower for a loan period that corresponds to its academic year,
or the entire balance of the program (so long as that balance does not exceed 12 months).
If the portion of the program that remained was less than an academic year, the loan would
be subject to proration.
5. When certifying a loan for returning student for a new BBAY, the Cost of Education may
include only those costs associated with the period for which the loan is certified. It may
not include any costs used in certifying the previous loan unless those costs represent
charges for which funds were returned to ED or refunded to the student, subsequent to
the previous withdrawal.
6. When a student reenters the same program within 180 days and before the end of the stu-
dent’s initial loan period, as long as the new End Date of the loan period would not push
the loan period beyond 12 months, a school can ask the lender/GA to establish a new end
date for the loan period and reschedule any second or subsequent disbursements. Similarly, a
Direct Loan school could change the original loan period end date (as long as the new
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Chapter 2 — Withdrawals and the Return of Title IV Funds
Loan Principles
date does not exceed the 12-month limit) and reschedule the second disbursement. In this
case the student is held to the same disbursement requirements that applied initially (e.g., for
one additional disbursement, they must complete 1/2 the coursework and 1/2 the time in the
loan period before they can receive the second disbursement).
7. When a student reenters the same program within 180 days and before the end of the
student’s initial loan period, if the new end date pushes the loan period beyond
12 months, or the lender or GA declines to adjust the loan period and reschedule the sec-
ond disbursement, the school can ask the GA to approve a loan with a new loan period
that begins on the date the borrower returns to school and extends for either the balance
of the program, an academic year, or 12 months, whichever is shorter. The student is eli-
gible to receive only the balance of the loan, and it must be made in multiple disburse-
ments.
The borrower would be ineligible for a new loan until the loan period ended. If some
portion of the program remains after the completion of the new loan period, the school
could certify another new loan for that portion of the program. If the portion of the pro-
gram that remained was less than an academic year, the loan would be subject to prora-
tion.
8. If a student reenters a program after the end date of the initial loan period or BBAY, a
school may certify a new loan for either the balance of the program, an academic year,
or 12 months, whichever is shorter. If the portion of the program that remained was less
than an academic year, the loan would be subject to proration.
A student who has completed the credits for which aid was awarded Clarification
does not have to be considered a withdrawal or placed on LOA if he or
she takes a break before enrolling in additional courses.
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Transfer Students
Example 1
Consider an academic program that consists of 1,500 clock hours, with a defined academic
year of 900 hours and 30 weeks of instructional time. For students who enter at the beginning
of the program, there would be four payment periods as follows:
Then, consistent with the regulations in 34 CFR 668.4(b), the school determines the pay-
ment periods in the 1,200 hours that constitute the student’s program. Since the number of
remaining hours in the program is greater than an academic year, the payment periods for the
rest of the program are:
1. the first 450 hours after the student transfers, and comprising the first half of an
academic year;
2. the next 450 hours in the academic year following the student’s transfer; and
3. the 300 hours remaining in the program (since this balance is one-half of an academic
year or less).
The institution would then award and disburse Title IV aid based upon the length of the
payment period(s) consistent with the awarding rules under each of the Title IV programs and
the Cash Management rules contained in Subpart K of Part 668 of the regulations.
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Chapter 2 — Withdrawals and the Return of Title IV Funds
On August 1, 2003, David Allen enrolled at Penny’s Hair Academy (PHA). After completing
400 of the 900 clock hours in his program, David had to relocate, and he withdrew from school.
On February 1, 2004, having settled into his new home, David enrolled at Marion’s Esthet-
ics Institute (MEI) as a transfer student. David was awarded 400 clock hours of transfer credit in
MEI’s 1000 clock-hour program (the program definition of an academic year is 900 clock hours).
When the financial aid officer (FAO) at MEI examined David’s 2003-2004 ISIR, he found the
following entry:
The FAO subtracted the 50% used previously from 100% and found that the percentage
of David’s scheduled award that remained unused was 50%. Therefore, David was eligible to
receive 50% of his scheduled Pell award of $4,050 during the balance of the award year. In ad-
dition, the FAO used the 600 hours remaining in David’s program to establish the appropriate
payment periods (per 34 CFR 668.4(b)) of 300 clock hours each.
The aid officer performed the required multiplication and determined that David could re-
ceive as much as $2,025 (.50 X $4,050 = $2,025) if he remained enrolled at MEI for the balance
of the year.
$4050 X 300 (hours in the period) ÷ 900 (hours in the academic year) = $1,350
in Pell funds. However, in the second payment period, David could only receive funds until
his total Pell at EIA reached $2,025 (his total for the year reached $4,050). Therefore, for the sec-
ond payment period at MEI, David could only receive $675 ($2,025 — $1,350 = $675).
On February 5, 2004, David came to the FAO at MEI and inquired about a loan like the one
he had at PHA. The FAO examined David’s ISIR and his record in NSLDS and determined that
David had received $1,313 in loan funds (from his first-year loan of $2,625) while attending PHA.
The FAO tells David that because there is an overlap of the two school’s academic years,
David is only eligible to receive a loan for the balance of his eligibility as a first-year student
— $1,312. In addition, the FAO tells David that the one-half of his loan will be disbursed within
a few days, and the balance when David has completed 300 clock hours (half of the hours in
the remainder of his program) and reached the midpoint of the loan period.
In the next section, we will discuss the data elements in the order in which they
occur on the worksheets. The discussion that follows is not a set of instructions.
It is an explanation of the criteria a school must consider as it enters data in the
steps of the calculation.
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Chapter 2 — Withdrawals and the Return of Title IV Funds
Any undisbursed Title IV aid for the period that the school uses as
the basis for the Return calculation is counted as aid that could have Conditions for late disbursement
cite
been disbursed as long as the following conditions were met before the 34 CFR 668.164(g)(2)
date the student became ineligible –
Limitations on making a late disburse-
1. for all programs except PLUS, the Department processed a ment cite
34 CFR 668.164(g)(4)
Student Aid Report (SAR) or Institutional Student Informa-
tion Record (ISIR) with an official Expected Family Contri-
bution (EFC) for the student (except in the case of a PLUS Official EFC
loan);
An “official EFC” is an EFC calculated by the
2. for a FSEOG award, the institution made the award to the Department and provided on a SAR or ISIR.
student; It may or may not be a valid EFC (defined
as an EFC based on information that is
3. for an FFEL loan or a Direct Loan, the institution certified or correct and complete).
originated the loan, as applicable; and
4. for a Federal Perkins Loan, the institution made the award to
the student.
As described in DCL GEN-05-16, and effective with its publication
on October 27, 2005, a promissory note must be signed for a loan to be
included as Aid that could have been disbursed in a Return calculation.
The signature may be obtained after the student withdraws. However in
order for the loan to be included as aid that could have been disbursed
the promissory note must be signed before the school performs the Re-
turn calculation.
Of course, a school can only include aid (e.g., the loan funds) for the
period for which the institution does the Return calculation. If the cal-
culation is performed on a payment period basis, the loan funds counted
are those for the payment period; if the calculation is performed on the
period of enrollment basis (e.g., the academic year basis), the loan funds
counted are those for the entire period of enrollment.
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When a student drops below The second principle provides that a student can never receive as a
half time before withdrawing post-withdrawal disbursement any funds from a disbursement that the
institution was prohibited from making on or before the date the student
If a student who is otherwise eligible for withdrew. Therefore, although the following potential disbursements can
a late first disbursement drops below
be counted as Aid that could have been disbursed (if intended for the pe-
half-time enrollment and then withdraws,
the institution would include any undis- riod for which the Return calculation is being performed) an institution
bursed Stafford loan funds in the Return is prohibited from disbursing –
calculation as “aid that could have been
disbursed.” However, an institution may
1. for nonstandard term credit-hour programs where the terms
never make a post-withdrawal disburse-
ment of Stafford funds a student could not are not substantially equal in length, credit-hour nonterm
have received if he or she had remained in programs, and clock-hour programs, a second disbursement of
school. FFEL or Direct Loan funds where the student has not reached
the later of the calendar midpoint of the loan period, or the
date that the student completes half of the academic course-
Making a separate work or clock hours (as applicable) in the loan period (34
determination of eligibility for a CFR 682.604(c)(7) or (8), or 34 CFR 685.301(b)(5), or (6));
post-withdrawal disbursement 2. a second or subsequent disbursement of FFEL or Direct Loan
Consider a student enrolled at a school
funds unless the student has graduated or successfully com-
that is not required to take attendance by pleted the loan period (34 CFR 668.164(g)(4)(ii));
an outside entity. The student registers for,
and on September 1, begins attendance in 3. a disbursement of FFEL, Direct, or Perkins loan funds for
12 credits. On September 15 the student which the borrower has not signed a promissory note;
drops classes worth 7 credits and his
enrollment status changes to less than half 4. for clock-hour or credit-hour nonterm programs, a disburse-
time. On December 1, the school receives ment of a Federal Pell Grant, ACG, or National SMART
$2,000 in Stafford loan funds for the Grant for a subsequent payment period when the student has
student.
not completed the earlier payment period for which the stu-
In reviewing it’s records the school dent has already been paid (34 CFR 690.75(a)(3) and 34 CFR
determines that the student is an 691.75(a)(3)&(4));
unofficial withdrawal. Though the school
can use the 50% point (November 1) as the 5. a disbursement of an FFEL or Direct Loan to a first-year,
withdrawal date, it must make a separate first-time borrower who withdraws before the 30th day of
determination of the student’s eligibility
the student’s program of study (34 CFR 668.164(g)(4)(iii))
for a post-withdrawal disbursement. In this
case, because the student lost eligibility for (except when this delay does not apply because of low default
Stafford funds on September 15 (the day rates); and
the student ceased to be enrolled at least
half time), the student may not receive a 6. a disbursement of a Federal Pell Grant, ACG or National
post-withdrawal disbursement of Stafford SMART Grant to a student for whom the institution did not
loan funds have a valid SAR/ISIR by the deadline established by ED (34
CFR 668.164(g)(4)(iv)) annually in the public deadline no-
tice.
Some schools can use the 50% point as the withdrawal date for a
student who unofficially withdraws in determining earned Title IV aid.
Important However, in order to determine whether the funds can be disbursed as
a post-withdrawal disbursement, the school must make a separate de-
termination of the date the student lost eligibility.
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Example 1
Consider a student who withdrew after completing 400 clock hours in a 900 clock-hour pro-
gram and before passing the midpoint in calendar time of the loan period. The loan period is the
900 clock-hour academic year. The payment periods are 450 hours each. The Return calculation is
done on a period of enrollment basis. Half of the FFEL or Direct Stafford loan and half of a Federal
Pell Grant were disbursed at the beginning of the first payment period and the student was sched-
uled to receive the other half in the second payment period. Because the student had not com-
pleted half of the clock hours and, for the loan, half of the time in the loan period, the student was
not eligible to receive the second installment of the loan and the Federal Pell Grant. Therefore, the
second disbursements were not made before the student withdrew.
Under current guidance, the second disbursements of both the Pell Grant and the loan are
included as aid that could have been disbursed in the calculation of earned Title IV aid so that the
amount of Title IV aid used in the calculation (and earned by the student) will be larger.
Please note, however, the institution still may not make a post-withdrawal
disbursement from the second scheduled disbursements of the FFEL or Pell funds
because of the prohibition on making these disbursements.
Example 2
Consider a student who completed 500 clock hours in a 900 clock-hour program and passed
the midpoint in calendar time of the loan period at an institution that uses the period of enroll-
ment as the basis for its Return calculations. The loan period is the 900 clock-hour academic year.
The payment periods are 450 hours each. Half of the Stafford loan was disbursed at the begin-
ning of the first payment period and the student was scheduled to receive the second half in the
second payment period. Although the student completed half of the clock hours and passed the
midpoint in calendar time of the loan period, and was otherwise eligible to receive the second in-
stallment of the loan, the second disbursement of the loan was not disbursed before the student
withdrew. Because the Department had processed a SAR/ISIR, and the institution previously had
certified or originated the loan before the student lost eligibility, the second disbursement of the
loan is included as aid that could have been disbursed in the calculation of earned Title IV aid.
However, the late disbursement regulations prohibit an institution from making a second or
subsequent disbursement of a FFEL or Direct Stafford Loan unless the student has graduated or
successfully completed the period of enrollment for which the loan was intended. The Return re-
quirements, including the post-withdrawal disbursement requirements, do not supersede this pro-
vision. Therefore, although in this case, a second or subsequent FFEL or Direct Loan
disbursement is counted as aid that could have been disbursed for purposes of determining
earned Title IV aid, the funds may not be disbursed as part of a post-withdrawal
disbursement.
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Example 3
Consider a student who withdraws after completing 350 clock hours in a 900
clock-hour program at an institution that uses the period of enrollment as the basis
for its Return calculations. The loan period is the 900 clock-hour academic year. The
payment periods are 450 hours each. The institution chooses to disburse the loan
in four disbursements. The first quarter of the Stafford loan for the first quarter (225
hours) of the period of enrollment has been disbursed. The student is scheduled to
receive the second quarter of the loan in the second half of the first 450-hour pay-
ment period. The student withdraws during the first payment period after receiving
only the first disbursement of the loan. The second, third, and fourth scheduled
disbursements of the loan are included in the calculation as Aid that could have been
disbursed, because the school has chosen to perform the Return calculation on the
period of enrollment basis for all students in this program. However, the institution
may not make a post-withdrawal disbursement from the second (or subsequent)
scheduled disbursement of the loan because of the prohibition on making second or
subsequent disbursements of FFEL or Direct Stafford loans when a student has not
completed the period for which the loan was intended.
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If the day the student withdrew occurs when or before the student
completed 60% of the payment period or period of enrollment, the per-
centage earned is equal to the percentage of the payment period or period
of enrollment that was completed. If the day the student withdrew occurs
after the student has completed more than 60% of the payment period
or period of enrollment, the percentage earned is 100%.
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Documentation
Documenting a student’s A school must document a student’s withdrawal date and maintain
withdrawal date cite that documentation as of the date of the institution’s determination that
34 CFR 668.22(b)(2)
34 CFR 668.22(c)(4) the student withdrew. If a school is required to take attendance, it is up
to the school to ensure that accurate attendance records are kept for pur-
poses of identifying a student’s last date of academic attendance. A school
must also determine the attendance records that most accurately support
its determination of a student’s withdrawal date and the school’s use of
one date over another if the school has conflicting information.
Official notification
Official notification cite A student may provide official notification of his or her intent
34 CFR 668.22(c)(1)(i) and (ii) to withdraw by following the school’s withdrawal process. In this
case, the withdrawal date is the date the student begins the school’s
Official notification defined withdrawal process. A student may also provide official notification
A notice of intent to withdraw that a student in other ways. If a student otherwise provides official notification (as
provides to an office designated by the in- explained below), the withdrawal date is the date notification was
stitution.
34 CFR 668.22(c)(5)(i) provided.
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In some cases, a school may use its policy for awarding or reporting Testing the use of a grading
final grades to determine whether a student who failed to earn a pass- policy
ing grade in any of his or her classes completed the period. For example,
a school might have an official grading policy that provides instructors If a school uses its grading policy to
with the ability to differentiate between those students who complete the determine whether students with failing
grades have unofficially withdrawn, during
course but failed to achieve the course objectives, and those students who compliance audits and program reviews
did not complete the course. If so, the institution may use its academic student records might be examined to
policy for awarding final grades to determine that a student who did not determine whether the grades assigned
receive at least one passing grade nevertheless completed the period. An- accurately represent the students’
attendance.
other school might require instructors to report, for all students awarded
a non-passing grade, the student’s last day of attendance (LDA). The
school may use this information to determine whether a student who re-
ceived all “F” grades withdrew. If one instructor reports that the student
attended through the end of the period, then the student is not a
withdrawal.
To serve as documentation that a student who received all “F” grades had not
withdrawn, such a grading policy would have to require instructors to award the
“F”’ (or equivalent grade) only to students who completed the course (but who
failed to achieve the course objectives). In addition, the policy would have to
require that instructors award an alternative grade, such as the “U” grade (in the
example above), to students who failed to complete the course. If the system al-
lows an instructor to indicate the date the student last participated in course ac-
tivities, this date would be helpful if an institution chose to use attendance at an
academically related activity as a student’s withdrawal date.
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1. examinations or quizzes,
2. tutorials,
3. computer-assisted instruction,
4. academic advising or counseling,
5. academic conferences,
6. completing an academic assignment, paper, or project, and
7. attending a study group required by the institution where
attendance is taken.
The determination of a student’s withdrawal date is the responsibility
of the school. Therefore, if a school is using a last date of attendance at
an academically related activity as the withdrawal date, (see the discussion
under When students fail to earn a passing grade in any of their classes) the
school, not the student, must document the student’s attendance. A
student’s certification of attendance that is not supported by school
documentation would not be acceptable documentation of the
student’s last date of attendance at an academically related activity.
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If the school could not or did not choose to document a last date of
attendance at an academically related activity for Dave (in this case, the
record of the exam), his withdrawal date would be January 5, the date of
Dave’s original notification of his intent to withdraw, not February 15.
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The withdrawal date can be no later than the date of the student’s
death. For an institution that is required to take attendance, the with-
drawal date for a student who has died is the last date of attendance as
determined from the institution’s attendance records. In all cases, the
institution should maintain the documentation it received that the
student has died and determine an appropriate withdrawal date. (For
more information on how the death of a student affects the Return pro-
cess, see the discussion under Death of a student later in this chapter.)
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However, the date of the institution’s determination that the student withdrew
is March 12, the date the student actually informed the institution that he would
not be returning. The date of the institution’s determination that the student with-
drew is used as the starting date for institutional action, such as the requirement
that an institution Return Title IV funds for which it is responsible no later than 45
days after this date.
Credit-hour programs
For a credit-hour program, the percentage of the period complet- Credit-hour programs cite
ed is determined by dividing the number of calendar days completed 34 CFR 668.22(f)(1)(i)
in the payment period or period of enrollment, as of the day the
student withdrew, by the total number of calendar days in the same
period.
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When Barbara began classes she received a Federal Pell Grant and a Staf-
ford Loan. She completed the 12 credit hours in the first payment period (the
first half of the program) in 120 days (past the calendar midpoint of the original
program length of 210 days). When Barbara completed the first half of her pro-
gram she became eligible for the second disbursements of both her Federal Pell
Grant and Stafford Loan.
For this student, therefore, the total number of days in the payment period
(and the number used in the denominator of the Return calculation) is 159. The
percentage of the payment period Barbara completed before withdrawing is
33.3% (53 days completed divided by 159 total days in the payment period).
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Looking at the records of students who have completed the same pro-
gram, the institution identifies other students who complete the two lessons
in approximately the same amount of time as David. The school determines
the number of days it took those students to complete the period. The in-
stitution uses the same number of days in the denominator of the Return
calculation for David.
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Clock-hour programs
Under HERA, only scheduled hours are now used to determine
the percentage of the period completed by a student withdrawing
from a clock-hour program. New
For a clock-hour program, the percentage of the period com-
pleted is determined by dividing the number of hours the student
was scheduled to complete in the payment period or period of enroll- Clock-hour programs cite
ment, as of the day the student withdrew, by the total number of 34 CFR. 668.22(f)(ii)
clock hours in the same period as follows:
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Loan funds
A school must notify a student, or parent for a parent PLUS
loan, in writing prior to making any post-withdrawal disbursement
of loan funds, whether those loan funds are to be credited to the
New student’s account or disbursed directly to the student (or parent).
The information provided in this notification must include the infor-
mation necessary for the student, or parent for a parent PLUS loan,
to make an informed decision as to whether the student or parent
would like to accept any disbursement of loan funds.
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The notice must identify the type and amount of the loan funds
it wishes to credit to the student’s account or disburse directly to the
student or parent, and explain that a student, or parent for a parent
PLUS loan, may accept or decline all or a portion of the funds. The
notice must also explain to the student, or parent for a parent PLUS
New
loan, the obligation to repay the loan funds whether they are dis-
bursed to the student’s account or directly to the borrower.
The notice must also make clear that a student, or parent for a
parent PLUS loan, may not receive as a direct disbursement loan
funds that the institution wishes to credit to the student’s account
unless the institution agrees to do so. If the student, or parent for a New
parent PLUS loan, does not wish to accept some or all of the loan
funds that the institution wishes to credit to the student’s account,
the institution must not disburse those funds.
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On November 12, (the last date school could have sent the notification was December 10th) –
30 days after the date of the institution’s determination that the student withdrew) the school sends
a notification to Michael stating that:
The school has until March 10, 120 days from the date of the institution’s determination that the
student withdrew, to disburse the $250 in Federal Pell Grant funds to Michael and to credit his ac-
count with the $100 of Federal Pell Grant funds to cover his outstanding parking fines. The school
sends Michael a check for the $250 in Federal Pell Grant funds and a letter confirming that $100 of
the Federal Pell Grant funds will be credited to his account and no loan funds will be disbursed.
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The initial amount of unearned Title IV grant aid due from the
student (Box S) is found by subtracting the loans to be repaid by the
student (Box R) from the initial amount of unearned aid due from the
student (Box Q).
New
The amount of grant overpayment due from a student is limited to
the amount by which the original grant overpayment (Box S) exceeds
half of the total Title IV grant funds disbursed and could have been dis-
bursed to the student (Box F).
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45-Day period example When a student receives additional funds during the 45-
day period of extended eligibility
On October 30th during the fall semester
a student withdraws and owes a grant Students who owe overpayments as a result of withdrawals generally
overpayment. On November 29th the insti- will retain their eligibility for Title IV funds for a maximum of 45 days
tution notifies the student of the overpay- from the earlier of (a) the date the school sends the student notice of the
ment. The student has 45 days (until
January 13) to repay the overpayment overpayment, or (b) the date the school was required to notify the stu-
in full or to make arrangements with the dent of the overpayment.
institution or the Department to repay the
overpayment. A student who receives Title IV funds within that period of extended
The spring semester begins on January 7, eligibility and then fails to return the overpayment or make repayment
before the 45-day period ends, and the arrangements becomes ineligible for additional Title IV program funds
student receives Title IV aid for the spring on the day following the 45-day period. However, any Title IV program
semester on January 10. The student then
fails to repay the overpayment in full or
funds received by the student during the 45-day period were received
sign a repayment agreement by the end of while the student was eligible. Therefore, those Title IV funds do not
the 45-day period - January 13. The have to be returned (unless the student withdraws a second time). A
student is not required to return the Title student who loses his or her eligibility for Title IV funds at the expiration
IV funds received on January 10. However,
the student becomes ineligible for
of the 45-day period will remain ineligible for additional Title IV funds
additional Title IV funds on January 14 and until the student enters into a repayment agreement with the
remains ineligible until he or she enters Department.
into a repayment agreement with the
Department.
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If a school sends notification to a student within the 30 days allowed, the 45-day period
begins on the day after the school sends the notification to the student. If a school deter-
mines on August 20 that a student withdrew and owes a repayment and the school sends
notification to the student on September 1 (within the 30 days allowed), then the first day
of the 45-day period is September 2. Unless the student takes positive action to resolve the
overpayment before the end of the 45-day period, the student loses his or her eligibility
on the 45th day. Thus, in this case the last day of the student’s eligibility for Title IV funds is
October 16.
Example 2 – A school fails to notify the student or notifies the student after the 30
days allowed.
If the school fails to notify the student or notifies the student after the 30 days allowed,
the 45-day period begins on the day after the end of the 30-day period (the date by which
the school should have sent the notification to the student). Consider a school that de-
termines on August 1 that a student withdrew on June 15. The school should have sent
the student a letter by July 15. Because it failed to do so, the first day of the 45-day period
is the day after the end of the 30-day period (July 16). Unless the student takes action to
resolve the overpayment, the last day of the student’s eligibility for Title IV funds is August
29, the end of the 45-day period that began on July 16.
If a student agrees to a repayment arrangement and then fails to meet the terms of
that arrangement, the student’s eligibility ends as of the date the student fails to
comply with the terms of the repayment arrangement.
Note: Borrower Services will not accept referrals for which the origi-
nal amount was less than $25.
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The school must note the student’s name, Recording student payments and reductions in the Direct
SSN, the school’s DUNS number, and the
complete 11-digit Document/Program
Loan Program
Award Number and award year on the If through its Return calculation a school determines that a student
check. A school must use a separate check
for each award year. has received an overpayment of Direct Loan funds, the school should
reduce the student’s award/disbursements by making a downward adjust-
ment in COD.
The school then returns the funds to the Department using the
Electronic Refund function in GAPS following the same procedures the
school follows when making other GAPS refunds/returns.
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processed and that the student should call back in ten days for further
information. If a student calls Borrower Services before a school has
reported the student’s overpayment to the NSLDS, Borrower Services will
find no record of the overpayment and will tell the student to contact the
school to resolve the discrepancy.
A student who does not take positive action during the 45-day period
becomes ineligible for Title IV funds on the 46th day from the earlier of
(1) the date the school sends a notification to the student of the overpay-
ment; or (2) the date the school was required to notify the student of the
overpayment. The student will remain ineligible until the student enters
into a satisfactory repayment agreement with the Department. An over-
payment resulting from a student’s withdrawal remains an overpayment
until it is repaid in full. Though a student may regain Title IV eligibility
by negotiating and satisfying the requirements of a satisfactory repayment
arrangement, the information on the student’s NSLDS account will con-
tinue to reflect the status of the overpayment until the debt is repaid in full.
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Required referrals
A school must refer to the Department:
REMINDER
All referrals to Borrower Services must be 1. a student who does not satisfy the requirements of a repay-
made on institutional letterhead. ment agreement with the school;
2. a student who fails to contact the school during the 45-day
period; and
3. a student who fails, during the 45-day period, to pay his or
her overpayment in full or enter into a repayment arrange-
ment.
If a school is referring to Borrower Services a student overpayment
previously reported to NSLDS, the school must also update the informa-
tion previously reported to NSLDS by changing the source field from
“School” to “Transfer.” If a school is referring a student who has failed
to satisfy the terms of his or her repayment agreement, the school should
also change the status code (Indicator field) from “Satisfactory Arrange-
ment Made” to “Overpayment.” If a school is referring for collection a
student not previously reported to NSLDS, the school must report the
account to NSLDS as a referred overpayment, enter “Transfer” as the
initial source and “Overpayment” as the status (Indicator field).
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Summary
• If during the 45-day period a student repays his or her debt Return of Title IV funds when
in full to the institution, the institution should neither report a school does not maintain a
the overpayment in NSLDS nor refer the student to Borrower separate federal bank account
Services. The Department considers a school that
• If during the 45-day period a student signs a repayment agree- maintains Title IV funds and general
operating funds in the same bank account
ment with the institution, the institution should immediately (commingles) to satisfy the requirement
(within a few days) make the appropriate entries in NSLDS. that it return unearned funds on a timely
basis if:
• If during the 45-day period a student indicates that he or
she will not or cannot repay the overpayment and wishes to • the school maintains subsidiary ledgers
negotiate a repayment agreement with the Department, the for each type of funds commingled in
institution should immediately (within a few days) report the that account that clearly show how and
overpayment in NSLDS and refer the overpayment to Bor- when those funds were used and recon-
ciled to its general ledger,
rower Services.
• If the institution will not be offering institutional repayment • the subsidiary ledger for each Title IV
arrangements to students and during the 45-day period a stu- program provides a detailed audit trail
on a student-by-student basis that
dent indicates that he or she cannot repay the debt in full, the
reconciles to the amount of Title IV pro-
institution should immediately (within a few days) report the gram funds received and disbursed by
overpayment in NSLDS and refer the overpayment to Bor- the school, and
rower Services.
• the school updates the relevant subsid-
• If a student fails to take any positive action during the 45- iary ledger accounts in its general ledger
day period, upon the expiration of that period the institution no later than 30 days after it determines
should immediately (within a few days) report the overpay- that the student withdrew.
ment in NSLDS and refer the overpayment to Borrower Ser-
vices. More specifically, the return of an un-
earned funds transaction should be
• If a student signs a repayment agreement with an institution recorded as a debit to a Title IV program
and at any time then fails to fulfill the terms of that agree- fund subsidiary ledger account and a credit
ment, the institution should immediately (within a few days) to the school’s operating fund subsidiary
ledger account. The date of the return is
report the overpayment in NSLDS and refer the overpayment
the date this transaction is posted to the
to Borrower Services. school’s general ledger.
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Volume 5 — Overawards, Overpayments, and Withdrawal Calculations, 2007-2008
The fax numbers for this purpose and school use only is –
(319) 665-7646
(319) 665-7646
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Volume 5 — Overawards, Overpayments, and Withdrawal Calculations, 2007-2008
5–106
Chapter 2 — Withdrawals and the Return of Title IV Funds
The student begins the The date the student begins The student’s withdrawal date,
school’s withdrawal process, or the school’s withdrawal pro- or the date of
cess, or notification, whichever is later.
The student otherwise pro-
vides official notification to the The date that the student
school of intent to withdraw. otherwise provides the
Official Notification notification.
Official notification not pro- The date that the school The date that the school
vided by the student because determines is related to the becomes aware that the
of circumstances beyond the circumstance beyond the student has ceased
student’s control. student’s control. attendance.2
Official Notification Not
Provided All other instances where The midpoint of the
student withdraws without payment period or period of
providing official enrollment, as applicable.
notification.
The student does not return The date that the student be- The earlier of the dates of the
from an approved leave of gan the leave of absence. end of the leave of
absence, or absence or the date the
student notifies the school he
The student takes an or she will not be returning to
Leave of Absence unapproved leave of that school.
Related absence.
(In the case of an unapproved
absence, the date that the
student began the leave of
absence.)
The student withdraws after The student’s original with- The date the school becomes
Withdrawal After rescinding a previous official drawal date from the aware that the student did
Rescission of Official notification of withdrawal. previous official notification. not, or will not, complete the
Notification payment period or period of
enrollment.
1. In place of the dates listed, a school may always use as a student’s withdrawal date the student’s last date of attendance at an
academically related activity if the school documents that the activity is academically related and that the student attended
the activity.
2. For a student who withdraws without providing notification to the school, the school must determine the withdrawal date no
later than 30 days after the end of the earliest of the (1) payment period or period of enrollment (as appropriate), (2) academic
year, or (3) educational program.
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Volume 5 — Overawards, Overpayments, and Withdrawal Calculations, 2007-2008
The law specifies how your school must determine the amount of Title IV program assistance
that you earn if you withdraw from school. The Title IV programs that are covered by this law are:
Federal Pell Grants, Academic Competetiveness Grants, National SMART grants, Stafford Loans, PLUS
Loans, Federal Supplemental Educational Opportunity Grants (FSEOGs), and Federal Perkins Loans.
When you withdraw during your payment period or period of enrollment (your school can de-
fine these for you and tell you which one applies) the amount of Title IV program assistance that you
have earned up to that point is determined by a specific formula. If you received (or your school or
parent received on your behalf ) less assistance than the amount that you earned, you may be able
to receive those additional funds. If you received more assistance than you earned, the excess funds
must be returned by the school and/or you.
The amount of assistance that you have earned is determined on a prorata basis. For example, if
you completed 30% of your payment period or period of enrollment, you earn 30% of the assistance
you were originally scheduled to receive. Once you have completed more than 60% of the payment
period or period of enrollment, you earn all the assistance that you were scheduled to receive for
that period.
If you did not receive all of the funds that you earned, you may be due a post-withdrawal dis-
bursement. If the post-withdrawal disbursement includes loan funds, your school must get your
permission before it can disburse them. You may choose to decline some or all of the loan funds
so that you don’t incur additional debt. Your school may automatically use all or a portion of your
post-withdrawal disbursement (including loan funds, if you accept them) for tuition, fees, and room
and board charges (as contracted with the school). For all other school charges, the school needs
your permission to use the post-withdrawal disbursement. If you do not give your permission (which
some schools ask for when you enroll), you will be offered the funds. However, it may be in your best
interest to allow the school to keep the funds to reduce your debt at the school.
Your school must also get your permission before it can disburse directly to you any Title IV grant
funds that are part of a post-withdrawal disbursement.
There are some Title IV funds that you were scheduled to receive that cannot be disbursed to
you once you withdraw because of other eligibility requirements. For example, if you are a first-time,
first-year undergraduate student and you have not completed the first 30 days of your program be-
fore you withdraw, you will not receive any FFEL or Direct loan funds that you would have received
had you remained enrolled past the 30th day.
If you receive (or your school or parent receive on your behalf ) excess Title IV program funds that
must be returned, your school must return a portion of the excess equal to the lesser of:
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Chapter 2 — Withdrawals and the Return of Title IV Funds
If your school is not required to return all of the excess funds, you must return the remaining
amount. Any loan funds that you must return, you (or your parent for a PLUS Loan) repay in accor-
dance with the terms of the promissory note. That is, you make scheduled payments to the holder of
the loan over a period of time.
Any amount of unearned grant funds that you must return is called an overpayment. The
amount of a grant overpayment that you must repay is half of the grant funds you received or were
scheduled to receive. You must make arrangements with your school or the Department of Educa-
tion to return the unearned grant funds.
The requirements for Title IV program funds when you withdraw are separate from any refund
policy that your school may have. Therefore, you may still owe funds to the school to cover unpaid
institutional charges. Your school may also charge you for any Title IV program funds that the school
was required to return. If you don’t already know what your school’s refund policy is, you can ask
your school for a copy. Your school can also provide you with the requirements and procedures for
officially withdrawing from school.
If you have questions about your Title IV program funds, you can call the Federal Student Aid In-
formation Center at 1-800-4-FEDAID (1-800-433-3243). TTY users may call 1-800-730-8913. Informa-
tion is also available on Student Aid on the Web at www.studentaid.ed.gov.
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Volume 5 — Overawards, Overpayments, and Withdrawal Calculations, 2007-2008
Post-withdrawal disbursement to student’s ac- As soon as possible, but no later than 120
count for: days of date school determined
Outstanding current (allowable) charges (tuition student withdrew, in accordance with
School and fees, room and board, etc.) requirements for disbursing Title IV
Minor (e.g., under $100) prior year charges that funds 34 CFR 668.164
the school has authorization to retain
Notification to student (or parent) of outcome of Not specified, but as soon as possible
late request for a post-withdrawal disbursement
School to student (request received by school after the
specified period and school chooses not to make
disbursement)
Referral of student to Collections, if student does Not specified, but as soon as possible
not pay overpayment in full, does not enter into
School repayment agreement, or fails to meet terms of
repayment agreement
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Chapter 2 — Withdrawals and the Return of Title IV Funds
Written notification of student’s eligibility for • Identify type and amount of Title
post-withdrawal disbursement of funds in excess IV funds that make up post-with-
of outstanding current educationally related drawal disbursement not credited to
charges student’s account
• Explain that student or parent may
School accept all or part of disbursement
• Advise student or parent that no
post-withdrawal disbursement will be
made unless school receives response
within the timeframe established by
the school
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Treatment Of Title IV Funds When A Student Withdraws From A Credit-Hour Program
Student’s Name Social Security Number
Date form
completed / / Date of school’s determination
that student withdrew / /
Period used for calculation (check one) Payment period Period of enrollment
Monetary amounts should be in dollars and cents (rounded to the nearest penny).
When calculating percentages, round to three decimal places. (For example, .4486 = .449, or 44.9%)
%x =
student who withdraws without notification, enter 50% in
Box H and proceed to Step 3. Or, the school may enter the I. $ .
last date of attendance at an academically related activity Box H Box G
for the “withdrawal date,” and proceed with the calculation
as instructed. For a student who officially withdraws, enter STEP 4: Total Title IV Aid to be Disbursed or Returned
the withdrawal date.
If the amount in Box I is greater than the amount in
H. Percentage of payment period or period of Box E, go to Post-withdrawal disbursement (Item J).
enrollment completed
Determine the calendar days completed in the pay- If the amount in Box I is less than the amount in
ment period or period of enrollment divided by the total Box E, go to Title IV aid to be returned (Item K).
calendar days in the payment period or period of enroll- If the amounts in Box I and Box E are equal, STOP.
ment (excluding scheduled breaks of five days or more No further action is necessary.
AND days that the student was on an approved leave of
absence). J. Post-withdrawal disbursement
Subtract Total Title IV aid disbursed for the payment
÷ = . % period or period of enrollment (Box E) from the
Completed days Total days amount of Title IV aid earned (Box I). This is the
amount of post-withdrawal disbursement due.
If this percentage is greater than 60%, enter 100% in
Box H and proceed to Step 3. Stop here, and enter the amount in Box 1 on Page 3
(post-withdrawal disbursement tracking sheet).
If this percentage is less than or equal to 60%, enter
that percentage in Box H, – = J. $ .
and proceed to Step 3. H. . % Box I Box E Step 4 continued
Student’s Name Social Security Number
STEP 4: Aid to be Disbursed or Returned CONTINUED STEP 7: Initial Amount of Unearned Title IV Aid
K. Title IV aid to be returned Due from the Student
Subtract the amount of Title IV aid earned (Box I) from Subtract the amount of Title IV aid due from the school
the Total Title IV aid disbursed for the payment period (Box O) from the amount of Title IV aid to be returned (Box K).
or period of enrollment (Box E). This is the amount of
Title IV aid that must be returned. – = Q. $ .
Box K Box O
– = K. $ . STEP 8: Repayment of the Student’s loans
Box E Box I
Subtract the Total loans the school must return (Box P) from the
STEP 5: Amount of Unearned Title IV Aid Due Net loans disbursed to the student (Box B) to find the amount of
from the School Title IV loans the student is still responsible for repaying (Box R).
These outstanding loans consist either of loan funds the student
L. Institutional charges for Tuition has earned, or unearned loan funds that the school is not
the payment period or responsible for repaying, or both; and they are repaid to the loan
Room
period of enrollment holders according to the terms of the borrower’s promissory note.
Board
Other
Other
– = R. $ .
Box B Box P
Other If Box Q is less than or equal to Box R, STOP.
The only action a school must take is to notify the holders
Total Institutional Charges
(Add all the charges together)
= L.$ . of the loans of the student’s withdrawal date.
If Box Q is greater than Box R, proceed to Step 9.
M. Percentage of unearned Title IV aid
100% – %= M. . % STEP 9: Grant Funds to be Returned
Box H S. Initial amount of Title IV grants for student to return
Subtract the amount of loans to be repaid by the student
N. Amount of unearned charges
(Box R) from the initial amount of unearned Title IV aid
Multiply institutional charges for the payment period or due from the student (Box Q).
period of enrollment (Box L) times the percentage of
unearned Title IV aid (Box M). – = S. $ .
x %= N. $ . Box Q Box R
T. Amount of Title IV grant protection
Box L Box M
Multiply the total of Title IV grant aid that was disbursed
O. Amount for school to return and could have been disbursed for the payment period
Compare the amount of Title IV aid to be returned or period of enrollment (Box F) by 50%.
(Box K) to amount of unearned charges (Box N),
and enter the lesser amount. x 50% = T. $ .
O. $ . Box F
U. Title IV grant funds for student to return
STEP 6: Return of Funds by the School Subtract the protected amount of Title IV grants
(Box T) from the initial amount of Title IV grants for
The school must return the unearned aid for which the student to return (Box S).
school is responsible (Box O) by repaying funds to the
following sources, in order, up to the total net amount
disbursed from each source.
– = U. $ .
Box S Box T
Amount for School
Title IV Programs to Return
STEP 10: Return of Grant Funds by the Student
1. Unsubsidized FFEL/Direct Stafford Loan
Except as noted below, the student must return the unearned
2. Subsidized FFEL / Direct Stafford Loan grant funds for which he or she is responsible (Box U). The grant
3. Perkins Loan funds returned by the student are applied to the following sources
in the order indicated, up to the total amount disbursed from that
4. FFEL/Direct PLUS (Graduate Student) grant program minus any grant funds the school is responsible for
5. FFEL / Direct PLUS (Parent) returning to that program in Step 6.
Note that the student is not responsible for returning funds
Total loans the
school must return
= P. $ . to any program to which the student owes $50.00 or less.
Title IV Grant Programs Amount To Return
6. Pell Grant
1. Pell Grant
7. Academic Competitiveness Grant
2. Academic Competitiveness Grant
8. National SMART Grant
3. National SMART Grant
9. FSEOG
4. FSEOG
POST-WITHDRAWAL DISBURSEMENT TRACKING SHEET
Amount from “Box J” of the Treatment of Title IV Funds When a Student Withdraws worksheet Box 1
$ .
II. Outstanding Charges For Educationally Related Expenses Remaining On Student’s Account
Subtract the Post-withdrawal Disbursement to be credited to the student’s account (Box 2) from the total Post-withdrawal
Disbursement due (Box 1). This is the amount you must offer to the student and/or parent as a Direct Disbursement.
$ . – $ . = $ Box 3 .$ .
Box 1 Box 2
Monetary amounts should be in dollars and cents (rounded to the nearest penny).
When calculating percentages, round to three decimal places. (For example, .4486 = .449, or 44.9%)
%x =
student who withdraws without notification, enter 50% in
Box H and proceed to Step 3. Or, the school may enter the I. $ .
last date of attendance at an academically related activity Box H Box G
for the “withdrawal date,” and proceed with the calculation
as instructed. For a student who officially withdraws, enter STEP 4: Total Title IV Aid to be Disbursed or Returned
the withdrawal date.
If the amount in Box I is greater than the amount in
H. Percentage of payment period or period of Box E, go to Post-withdrawal disbursement (Item J).
enrollment completed
Determine the calendar days completed in the pay- If the amount in Box I is less than the amount in
ment period or period of enrollment divided by the total Box E, go to Title IV aid to be returned (Item K).
calendar days in the payment period or period of enroll- If the amounts in Box I and Box E are equal, STOP.
ment (excluding scheduled breaks of five days or more No further action is necessary.
AND days that the student was on an approved leave of
absence). J. Post-withdrawal disbursement
Subtract Total Title IV aid disbursed for the payment
÷ = . % period or period of enrollment (Box E) from the
Completed days Total days amount of Title IV aid earned (Box I). This is the
amount of post-withdrawal disbursement due.
If this percentage is greater than 60%, enter 100% in
Box H and proceed to Step 3. Stop here, and enter the amount in Box 1 on Page 3
(post-withdrawal disbursement tracking sheet).
If this percentage is less than or equal to 60%, enter
that percentage in Box H, – = J. $ .
and proceed to Step 3. H. . % Box I Box E Step 4 continued
Student’s Name Social Security Number
STEP 4: Aid to be Disbursed or Returned CONTINUED STEP 7: Initial Amount of Unearned Title IV Aid
K. Title IV aid to be returned Due from the Student
Subtract the amount of Title IV aid earned (Box I) from Subtract the amount of Title IV aid due from the school
the Total Title IV aid disbursed for the payment period (Box O) from the amount of Title IV aid to be returned (Box K).
or period of enrollment (Box E). This is the amount of
Title IV aid that must be returned. – = Q. $ .
Box K Box O
– = K. $ . STEP 8: Repayment of the Student’s loans
Box E Box I
Subtract the Total loans the school must return (Box P) from the
STEP 5: Amount of Unearned Title IV Aid Due Net loans disbursed to the student (Box B) to find the amount of
from the School Title IV loans the student is still responsible for repaying (Box R).
L. Institutional charges for These outstanding loans consist either of loan funds the student
Tuition has earned, or unearned loan funds that the school is not
the payment period or responsible for repaying, or both; and they are repaid to the loan
Room
period of enrollment holders according to the terms of the borrower’s promissory note.
Board
Other
Other
– = R. $ .
Box B Box P
Other If Box Q is less than or equal to Box R, STOP.
The only action a school must take is to notify the holders
Total Institutional Charges
(Add all the charges together)
= L.$ . of the loans of the student’s withdrawal date.
If Box Q is greater than Box R, proceed to Step 9.
M. Percentage of unearned Title IV aid
100% – %= M. . % STEP 9: Grant Funds to be Returned
Box H S. Initial amount of Title IV grants for student to return
N. Amount of unearned charges Subtract the amount of loans to be repaid by the student
(Box R) from the initial amount of unearned Title IV aid
Multiply institutional charges for the payment period or due from the student (Box Q).
period of enrollment (Box L) times the percentage of
unearned Title IV aid (Box M). – = S. $ .
x %= N. $ . Box Q Box R
T. Amount of Title IV grant protection
Box L Box M
Multiply the total of Title IV grant aid that was disbursed
O. Amount for school to return and could have been disbursed for the payment period
Compare the amount of Title IV aid to be returned or period of enrollment (Box F) by 50%.
(Box K) to amount of unearned charges (Box N),
and enter the lesser amount. x 50% = T. $ .
O. $ . Box F
U. Title IV grant funds for student to return
STEP 6: Return of Funds by the School Subtract the protected amount of Title IV grants
(Box T) from the initial amount of Title IV grants for
The school must return the unearned aid for which the
student to return (Box S).
school is responsible (Box O) by repaying funds to the
following sources, in order, up to the total net amount
disbursed from each source.
– = U. $ .
Box S Box T
Amount for School
Title IV Programs to Return
STEP 10: Return of Grant Funds by the Student
1. Unsubsidized FFEL/Direct Stafford Loan
Except as noted below, the student must return the unearned
2. Subsidized FFEL / Direct Stafford Loan grant funds for which he or she is responsible (Box U). The grant
3. Perkins Loan funds returned by the student are applied to the following sources
in the order indicated, up to the total amount disbursed from that
4. FFEL/Direct PLUS (Graduate Student) grant program minus any grant funds the school is responsible for
5. FFEL/Direct PLUS (Parent) returning to that program in Step 6.
Total loans the Note that the student is not responsible for returning funds
school must return
P. $ . to any program to which the student owes $50.00 or less.
Title IV Grant Programs Amount To Return
6. Pell Grant
1. Pell Grant
7. Academic Competitiveness Grant
2. Academic Competitiveness Grant
8. National SMART Grant
3. National SMART Grant
9. FSEOG
4. FSEOG
POST-WITHDRAWAL DISBURSEMENT TRACKING SHEET
Amount from “Box J” of the Treatment of Title IV Funds When a Student Withdraws worksheet Box 1
$ .
II. Outstanding Charges For Educationally Related Expenses Remaining On Student’s Account
Subtract the Post-withdrawal Disbursement to be credited to the student’s account (Box 2) from the total Post-
withdrawal Disbursement due (Box 1). This is the amount you must offer to the student and/or parent as a Direct
Disbursement.
$ . – $ . = $ Box 3 .$ .
Box 1 Box 2
Telephone Number:
If the overpayment includes an Academic Competitiveness or National Smart Grant, enter the Award ID (see instructions on next page).
Parent/Spouse Information
Name (Last, First, MI): Address:
Telephone Number:
School Information
If your Pell Reporting ID is different than your Pell Attended ID, please report both. Otherwise, just report the Attended ID.
Dates of disbursement:
(Must match NSLDS overpayment record)
* If the overpayment is the result of a withdrawal, provide the date of the withdrawal / /
If the overpayment is not the result of a withdrawal, please provide a brief explanation of the reason for the overpayment.
Financial Award Number for ACG: Use “001” as the Financial Award Number when the overpayment is
from the student’s first ACG award for the award year at the school regardless of whether that award is a
Year 1 ACG for the student’s first academic year or a Year 2 ACG for the student’s second academic year.
Use “002” as the Financial Award Number when the overpayment is from the Year 2 ACG award AND
the student had an Academic Year 1 ACG award in the same award year at the same school.
Financial Award Number for National SMART Grant: Use “001” as the Financial Award Number when
the overpayment is from the student’s first National SMART Grant award for the award year at the school
regardless of whether that award is a Year 3 SMART Grant for the student’s third academic year or a
Year 4 SMART Grant for the student’s fourth academic year. Use “002” as the Financial Award Number
when the overpayment is from a Year 4 SMART Grant award AND the student had an Academic Year 3
SMART Grant award in the same award year at the same school.
Example 1: A student received half of her Year 1 ACG in the amount of $375 for the fall term and then
advances to her second academic year for the spring term of the same award year at the same school where
she receives $650 of her Year 2 ACG. The COD origination record for this student’s Year 1 ACG of $375
will include a Financial Award Number of “001.” The reporting to COD of this student’s Year 2 ACG
award of $650 will be a new origination and will include a Financial Award Number of “002” because the
Year 2 ACG award was made within the same award year as the Year 1 ACG award. If the student with-
draws from the spring term owing an ACG overpayment of all or part of the $650 Year 2 ACG, the school
would use Financial Award Number “002” in the ACG Award ID in the referral to the Department.
Example 2: A student received all of his Year 2 ACG during the fall and spring terms of the same award
year. At the end of the spring term, but within the same award year, he advances to his third academic year.
The school awards the student the first part of his Year 3 SMART Grant for his summer enrollment. The
COD reporting for this student’s Year 3 SMART Grant will include a Financial Award Number of “001”
because it is the first SMART Grant award made within the award year. If the student withdraws from the
summer term owing a SMART Grant overpayment, the school would use the Financial Award Number
“001” in the SMART Grant Award ID in the referral to the Department.
5–119