Financial Aid Refund/Withdrawal Calculations
The Higher Education Act of 1998 passed new provisions governing what must happen to a student’s federal student aid if he or she completely withdraws from school in any semester. The policy governs all federal grant and loan programs, including Federal Pell Grant, Federal SEOG, Federal Direct Loans (both subsidized and unsubsidized) and Federal Plus Loans to parents. Southern Vermont College institutional funding (SVC grants/scholarships) are not governed by this policy. Instead, they are prorated in accordance with the tuition charge for which the withdrawing student is responsible.
In general, students “earn” their financial aid awards directly in proportion to the number of days of the semester attended. If a student completely withdraws from school during a semester, 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 more assistance than the student earns, the unearned excess funds must be returned to the source from which they came.
If a student has completed more than 60% of the semester, he or she has earned 100% of their aid. 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 the Financial Aid Office.
A student’s withdrawal date will be determined by the College as the date the student began the College’s withdrawal process, or the date the student officially notified the College of the intent to withdraw; or the student’s last date of attendance at an academically-related event 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 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 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 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 Business Office to pay the balance.
TREATMENT OF TITLE IV AID WHEN A STUDENT WITHDRAWS AS NOTED IN THE FEDERAL STUDENT AID (FSA) HANDBOOK, 2015-2016 VOLUME 5 WITHDRAWALS AND THE RETUIRN OF TITLE IV FUNDS
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 at Southern Vermont College that are covered by this law are: Federal Pell Grants, Direct Loans, Direct PLUS Loans, and Federal Supplemental Educational Opportunity Grants (FSEOGs).
Though your aid is posted to your account at the start of each period, you earn the funds as you complete the period. If you withdraw during your payment period or period of enrollment (your school can define these for you and tell you which one applies to you), 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 pro rata 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 disbursement.
If your 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 of grant funds for tuition, fees, and room and board charges (as contracted with the school). The school needs your permission to use the post-withdrawal grant disbursement for all other school charges. If you do not give your permission (some schools ask for this when you enroll), you will be offered the funds. However, it may it may be in your best interest to allow the school to keep the funds to reduce your debt at the school.
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 before you withdraw, you will not receive any 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:
1. your institutional charges multiplied by the unearned percentage of your funds, or
2. the entire amount of excess funds.
The school must return this amount even if it didn’t keep this amount of your Title IV program 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 Direct PLUS Loan) repay in accordance 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 maximum amount of a grant overpayment that you must repay is half of the grant funds you received or were scheduled to receive. You do not have to repay a grant overpayment if the original amount of the overpayment is $50 or less. You must make arrangements with your school or the Department of Education 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. Review your school’s refund policy.
SVC Refund Policy:
Refund of Tuition, Room and Board
Students dismissed by the college during the semester for academic or disciplinary reasons are not eligible for a refund of tuition or room and board charge.
Refunds are based on the official Withdrawal Leave of Absence date (approved). Students who officially Withdraw or take a Leave of Absence are allowed a refund according to the schedule below*:
• 100% refunded from the first day of class through the last date of Add/Drop at 5:00 p.m.
• 75% refunded seven (7) calendar days after the Add/Drop date at 5:00 p.m.
• 50% refunded fourteen (14) calendar days after the Add/Drop date at 5:00 p.m.
On the 15th calendar day after Add/Drop there will be no refunds of Tuition or Room and Board charges.
Information regarding the Withdrawal/Medical Leave of Absence policy and procedures can be found in the College Catalog.
*Approved medical withdrawal room and board refunds will follow the above refund schedule; however, tuition will be pro-rated.
Your school can also provide you with the requirements and procedures for officially withdrawing from school. See the information in the SVC Catalog on the Web.
If you have questions about your Title IV program funds, you can call the Federal Student Aid Information Center at 1-800-4-FEDAID (1-800-433-3243). TTY users may call 1-800-730-8913. Information is also available on Student Aid on the Web at www.studentaid.ed.gov.
Academic Eligibility for Federal Title IV (Federal Student Aid) Programs
Satisfactory Academic Progress:
Students need to remain in good standing, meet certain academic requirements and maintain satisfactory academic progress to continue to be eligible to receive Federal Title IV funds (federal financial aid).
Another federal regulation which affects eligibility for Federal Title IV (federal financial aid) is called the 150% rule. This means that a student has 150% of the time allotted to complete their degree or program. For example, a student pursuing a 4-year degree, must complete that degree in 6 years or they will lose all financial aid eligibility.