Financial Aid Refund Calculations
As part of the Higher Education Amendments of 1998, Congress passed provisions governing what must happen to a student’s Federal student financial assistance if he or she completely withdraws from school in any term or receives all F(s). The policy governs all Federal grant and loan programs, including Federal Pell Grant, Federal SEOG, Federal Perkins Loan, Federal Direct Loans (both Subsidized and Unsubsidized), and Federal PLUS Loans to parents. It does not apply to earnings from the Federal Work Study Program. Financial aid programs funded directly by The College of Saint Rose (Merit-Based Scholarships, Grants-in-Aid, etc.) are not governed by this policy. Instead, the funds are prorated in accordance with the tuition charge for which the withdrawing student is responsible.
In general, the policy assumes that a student “earns” Federal financial aid awards directly in proportion to the number of days of the term attended. If a student completely withdraws from school during a term, the school must calculate, according to a specific formula, the portion of the total scheduled financial assistance the student has earned and is, therefore, entitled to receive up to the time of withdrawal. If a student receives (or the College receives on his or her behalf) more assistance than the student earns, the unearned excess funds must be returned to the sources from which they came.
The portion of Federal grants and loans a student is entitled to receive is calculated on a percentage basis by comparing the total number of days in the semester to the number of days the student completed prior to the withdrawal date. For example, if a student completes 30% of the semester, he or she earns 30% of the assistance he or she was originally scheduled to receive. This means that 70% of the scheduled awards remain unearned and must be returned.
If a student has completed more than 60% of the semester, he or she is considered to have earned all (100%) of the assistance. If the student withdraws from the College (either officially or unofficially) before completing 60% of the semester, he or she may have to repay any unearned Federal monies that were already disbursed. The Financial Aid Office will determine the date corresponding to the 60% completion of each semester, and examples of the Title IV Refund Formula results will be available by contacting that office.
A student’s withdrawal date will be determined by the College as (1) the date the student began the College’s withdrawal process, or the date the student officially notified the College of intent to withdraw; (2) the midpoint of the semester if the student withdraws without notifying the College; or (3) the student’s last date of attendance at an academically-related activity as documented by the College.
If the student has received excess funds that must be returned, the College shares with the student the responsibility of returning those excess funds. The College’s portion of the excess funds to be returned is equal to the lesser of the entire amount of the excess funds or the student’s total tuition and fee charges multiplied by the percentage of unearned funds, depending upon whether the unearned funds were used to pay College charges or were refunded directly to the student.
If the College is not in possession of all of the excess funds, the student must return the remaining amount. Any loan funds that the student must return must be repaid according to the terms of the promissory note. If the student must return any grant funds, the law provides that the amount the student must repay is to be reduced by 50%. This means that only half of any excess funds received must be returned. If the return of unearned Federal assistance causes any portion of the student’s tuition and fees to become uncovered, the College will bill the student. In such cases, the student will be required to make arrangements with the Bursar’s Office to pay the balance.
Any award money the student does have to return is considered to be a Federal grant overpayment. The student must either repay that amount in full or make satisfactory arrangements with either the College or the Department of Education to repay the amount. The student must complete these arrangements within 45 days of the date the College provides notification of overpayment status, or the student will risk losing eligibility for further Federal financial assistance.
The amendment specifies the priority order in which refunds must be made as follows: Unsubsidized Direct Loan, Subsidized Direct Loan, Perkins Loan, PLUS Loan, Federal Pell Grant, Federal SEOG, other Title IV funds the student may have been awarded.