Return of Title IV Funds

 


Return to Title IV Funds

The Financial Aid Office is required by federal regulations to calculate a Return to Title IV Funds for all students who withdraw, are dismissed, take a leave of absence, or stop attending before completing the term. The policy applies to all students who discontinue enrollment in all classes, on or after the first day of the term. 

Title IV financial aid funds are awarded under the assumption that a student will attend the institution for the entire period in which federal assistance is awarded. When a student withdraws from all courses for any reason, including medical withdrawals, the student may no longer be eligible for the full amount of Title IV funds they were awarded. The return of funds is based upon the premise that students earn their financial aid in proportion to the amount of time in which they are enrolled. A pro-rated schedule is used to determine the amount of federal aid a student will have earned at the time of the withdrawal. Thus, a student who withdraws in the second week of classes has earned less of their financial aid than a student who withdraws in the seventh week. Students who complete more than 60 percent of the term are considered to have earned 100 percent of their financial aid.

Based on these federal guidelines, any student who receives federal financial aid and does not complete at least 60% of the term could be responsible for repaying a portion of the aid they received. Students who do not begin attendance must repay all financial aid disbursed for the term. Academic policies on withdrawing from the university are available in the academic office and administration office. See the leave of absence and withdrwal policies.

The Return of Title IV Funds policy is separate from the university’s refund policy. A student who withdraws from the university may be required to return unearned federal aid and still owe SBU for tuition and fees. For more information on SBU's withdrawal policy, please contact the Office of Financial Aid

 

Withdrawal Date

The withdrawal date established by the Office of the Registrar is the date used by the Office of Financial Aid to determine the percentage of Title IV aid earned by the student. Students are responsible for notifying the Office of the Registrar of their intent to take a Leave of Absence (LOA) or Withdraw (W) from courses.

 

Unofficial Withdrawals

When the student withdraws, whether it is an official withdrawal or unofficial, the amount of aid earned by the student must be determined. If the amount disbursed to the student is greater than the amount earned, unearned funds must be returned. Students who fail to earn a passing grade in at least one class will be evaluated to determine if they withdrew unofficially (stopped attending classes) or they must prove they participated in an academically related activity past the 60% point of the payment period. In most cases, if a student cannot prove they were in attendance past the 60% point of the payment period, the institution can use the midpoint of the payment period (quarter) as the last date of attendance for calculation purposes.

Examples of academically related activities are: exams, quizzes, tutorials, computer based instruction, academic advising or counseling, academic conferences, completing an academic assignment, paper or project, and attending a school-assigned study group.

 

Repayment of Unearned Aid

Once SBU has determined that a student has completely withdrawn, a Return of Title IV Funds calculation will be performed within 30 days. SBU will notify the student in writing of their revised eligibility after the Return of Title IV Funds calculation is completed. If the student owes unpaid tuition and fees, the student will receive an updated invoice from the university.

The responsibility to repay unearned aid is shared by the institution and the student. Students might be required to return additional funds directly to the Department of Education. If this occurs, you will be notified in the written letter that is sent to you by the office of Financial Aid.

 Calculation of Amount of Title IV aid earned by student

The earned portion of federal aid is calculated on a daily basis using calendar days from the first day of instruction. Based on the date of withdrawal, drop or leave of absence, the Financial Aid Office will determine the amount, if any, of "unearned" federal financial aid received by the student. The calculation to determine the percentage of the enrollment period completed by the student is as follows:
Enrolled days / total number of days in the quarter = % of Aid Earned          

The result will equal the percentage of the enrollment period completed.  The amount of federal financial aid that was paid or could have been paid to the student will be based on this percentage. Any aid received in excess of the earned amount is considered unearned. If a student receives more financial aid than the amount earned, the unearned portion will be returned to Department of Education and the student will be billed for the overpayment.

 Post-Withdrawal Disbursement

In some cases, a student may be eligible to receive a “post-withdrawal” disbursement after the student completely withdraws from the university when the amount of aid earned is less than the amount of aid disbursed. In such cases, the Financial Aid Office will notify the student of the “post-withdrawal” disbursement by sending an award letter to the student via US postal service. The award letter must be returned to the Financial Aid Office within fourteen (14) days or the “post-withdrawal” disbursement will be cancelled.

There are some Title IV funds that a student may have been scheduled to receive that cannot be disbursed to a student once they have completely withdrawn because of other eligibility requirements. For example, if a student is a first-time, first year, undergraduate student and has not completed the first 30 days of their program before they withdraw, they will not receive any Federal Direct Loan funds that they would have received, if they had remained enrolled past the 30th day.

 

Return of Funds

Federal Title IV financial aid is returned in the order mandated by the U.S. Department of Education. No program can receive a refund if the student did not receive aid from that program. Funds must be returned within 45 days of the established withdrawal date. Federal guidelines mandate that we return federal funds in the following order:

  • Federal Direct Unsubsidized Loan
  • Federal Direct Subsidized Loan
  • Federal Perkins Loan
  • Federal Direct PLUS loan
  • Federal Pell Grant
  • Federal Supplemental Educational Opportunity Grant (FSEOG)
  • Federal Teach Grant
  • Other Title IV aid

 Other Aid

The Return of Title IV Fund Policy does not apply to state grants such as the Cal Grant, institutional loans, or university grants or scholarships. These types of aid are returned based on the SBU Refund Policy.