Return of Title IV Funds Policy

If a financial aid student withdraws from a class, he or she could be liable for a Pell grant repayment. Our Return to Title IV Policy outlines how that repayment is determined.

Higher Education Amendments of 1998:

Official Withdrawal: A student who received Title IV funding ( ex: Pell grant, FSEOG, student loans, or federal work-study) and withdraws from all classes prior to the 60% point of the semester will owe funds back to the U.S. Department of Education and to Calhoun Community College.

Unofficial Withdrawal: A student who received Title IV funding (ex. Pell grant, FSEOG, student loans, or federal work-study) and unofficially withdraws (stops attending) from all classes may owe funds back to the U.S. Department of Education and to Calhoun Community College. This amount is calculated at the 50% point of the term.

The concept behind the policy is that the college and the student are allowed to retain only the amount of Title IV funding (federal aid) that is earned. If a student withdraws or stops attending classes, whether any credits are earned for the class or not, a portion of the aid received is considered to be unearned and must be returned to the Title IV program from which it was received. For Title IV purposes, the withdrawal date is the last date of attendance as determined by attendance records or withdrawal form.

Return to Title IV Policy:

The first step is a series of formulas to determine the amount of aid which must be returned. Following the determination of the last date of attendance, the school must calculate the number of days attended and the total number of days the student was scheduled to complete within the term; weekends count and any periods of no classes which are five days in length or greater are excluded. Days attended are then divided by the days in the term the student was scheduled to complete. The percentage is multiplied by total aid for which the student is eligible to determine the amount of aid earned (% completed x total aid = earned aid). Total aid – earned aid = unearned aid (aid to be returned).

The next step is for the school to determine total institutional charges and multiply that figure by the percentage of unearned aid (100% – % completed = % unearned). It makes no difference which type of resources actually paid the school bill; the law assumes that Title IV aid goes first to pay the institutional charges. Institutional charges x % unearned = amount returned by school. The school must then return the amount of unearned aid, up to the maximum received, to each of the Title IV programs in the following order:

  • Unsubsidized Direct Stafford Loan
  • Subsidized Direct Stafford Loan
  • Federal Perkins Loan (Calhoun does not participate)
  • Direct Plus Loan
  • Federal Pell Grant
  • Federal Supplement Education Opportunity Grant (FSEOG)

The school then calculates the amount for which the student is responsible by subtracting the amount returned by the school from the total amount which is unearned. That remaining amount is the student’s share and is allocated in the same order as above. Total amount unearned – amount returned by school= $ amount the student is required to return to Title IV funds. Once the school determines the dollar amounts owed to the student to the US Department of Education, the student will be notified of what he or she owes. Funds that must be returned by the student to the loan programs can be paid in accordance with normal loan repayment terms. If the student’s portion of unearned Title IV funds includes a federal grant, the student has to pay no more than 50% of the initial Pell award that the student is responsible for returning. A student has 45 days to make repayment and does not have to repay a grant overpayment of $50.00 or less. Unpaid balances will be reported to NSLDS, the National Student Loan Database system, and turned over to the U.S. Department of Education for collection. Until overpayments are repaid or satisfactory repayment arrangements have been made, student will be ineligible for further Title IV awards at any institution.

Once the school determines the amount Calhoun Community College is required to repay the U. S. Department of Education, the school returns the funds and bills the student for the amount of money the school had to repay. This policy is separate from the school’s institutional refund policy. Unpaid balances due to Calhoun Community College that results from amounts returned to Title IV programs and other sources of aid will be charged back to the student. The student is also responsible for paying all outstanding tuition balances to the college. The student’s account will be placed on HOLD for registration and transcripts until the balance is paid in full. If a student does not attend any classes or ceases attendance during the 100% refund period, aid may have to be reduced to reflect appropriate enrollment status prior to recalculating Return to Title IV funds.