Return of Title IV Funds
Federal regulations require Big Sandy Community and Technical College (BSCTC) to recalculate a students eligibility for federal financial aid funds the student has earned when the student completely withdraws or fails to earn a passing grade in all classes from an institution during the semester in which they began attendance,. For more information on officially withdrawing from classes go here.
BSCTC must determine the amount of Title IV grant and/or loan assistance the student has earned. The date students earn 100% of their Title IV assistance is shown on the academic calendar for each term. Students whose attendance is documented past this date (60% mark) will not be subject to the Return to Title IV policy. At the time a student is unsuccessful in all classes (receives grades of E, F, W, or Z) or withdraws from all classes, the Financial Aid Office will calculate the percentage of aid that must be returned. See an example below.
Example: A freshman withdraws 11 days into the semester. They were charged full-time in-state undergraduate tuition and institutional charges of $1,000 for the semester. The student received a PELL grant of $1400 and FSEOG of $1200 for a total of 2600 of Title IV aid disbursed.
The payment period began January 8th and ended May 4th. There are 110 days in the semester, they attended 11 days.
- Percentage of earned aid = 11 days/110 days = .100 = 10% earned
- Since the percentage earned is less than 60%, the percentage of Title IV aid earned = 10%
- Multiply the % of Title IV aid earned (10%) by the total Title IV aid disbursed and
could have been disbursed ($2600)
- $2600 x .100 = $260.00 = amount of Title IV aid earned
- Because the total aid disbursed ($2600) is greater than the total aid earned ($260),
Title IV aid will need to be returned.
- $2600 - $260 = $2340. Title IV aid to be returned = $2340
- The amount of unearned Title IV aid due from the school is calculated
- Institutional charges for the payment period = $1000 tuition and fees
- Subtract the percentage of Title IV aid earned (10%) from 100% = 90%
- Calculate the unearned institution charges. Institution charges ($1000) x percentage of Title IV aid unearned (90%) = $900
- Compare the amount of Title IV aid to be returned ($2340) to the unearned institutional charges ($900) the lesser amount ($900) is the amount of Title IV aid due from the school.
The unearned aid will be returned to the U.S. Department of Education. The returned unearned aid will likely create a bill for the student. If so, please contact Business Services for payment options.
Funds will be returned in the following order:
- Unsubsidized Direct Stafford Loan
- Subsidized Direct Stafford Loan
- Direct Plus Loan
- PELL Grant
- Federal Supplemental Educational Opportunity Grant (FSEOG)
If a student receives less federal student aid than the amount earned, the school must offer a disbursement of the earned aid that was not received. This is called a post-withdrawal disbursement.
BSCTC is allowed to automatically use all or a portion of the students post-withdrawal disbursement of grant funds for tuition and fees. BSCTC needs the students permission to use the post-withdrawal grant disbursement for all other school charges. If the student does not give permission, the student must be offered the funds.
If the students post-withdrawal disbursement includes loan funds, BSCTC must get the students permission in writing before the funds can be disbursed. The student may choose to decline some or all of the loan funds so they dont incur additional debt.It is clearly in the students best interest to borrow as little as possible. If the student does not give permission for the school to disburse enough loan funds to cover their institutional charges, the student will be responsible for paying the balance due on their account.
The college will notify the student by mail of eligibility for a post-withdrawal disbursement and they have 14 days to accept or reject any balance.
If you are concerned you may not complete this semester please contact the BSCTC Financial Aid Office nearest you.