Return TO Title IV Aid (R2T4)
Withdrawal from Classes: Return to Title IV Policy
Students who either “officially” or “unofficially” withdraw from all classes during the term, depending upon when the withdrawal occurs, may be refunded all or a portion of their tuition and fee charges. If the student is a financial aid recipient, State Fair Community College, as well as the student, may be required to return to the federal government all or a portion of the aid that had been disbursed and/or applied to the student’s account.
An “official” withdrawal is when a student formally drops all of their classes for a given term. This is generally done by the student. An “unofficial” withdrawal is when a student is enrolled in at least one class, for a given term, which he/she does not formally drop (as indicated in the previous two sentences) and the student does not successfully complete any of the classes in which he/she is enrolled for that term with a grade of “A, B, C, D.”
If the student withdraws from school, “officially” or “unofficially,” before the term is completed and the student was the recipient of Title IV financial aid funding, Federal Return to Title IV Regulations require the Financial Aid Office to calculate both the amount of earned and unearned aid for the period of withdrawal. If the student received more assistance than he/she “earned” by only attending a portion of the term, the excess funds must be returned by the College and/or the student to the federal government.
Federal financial aid law specifies how a school must determine the amount of Student Financial Aid (SFA) program assistance that you earn if you completely withdraw from all of your classes. The law requires that, when you withdraw during an enrollment/payment period, the amount of SFA program assistance that you have earned up to that point is determined by a specific formula. If you received (or your school received on your behalf) less assistance than the amount that you earned, you will be able to receive those additional funds. If you received more assistance than you earned by only attending a portion of the term, the excess funds must be returned by the College and/or the student to the federal government.
The Calculation (From student's perspective)
The federal formula requires a return of Title IV financial aid if you received federal financial aid assistance in the form of a Pell Grant, Supplemental Educational Opportunity Grant, Stafford Direct Loans, or Parent Loan for Undergraduate Students (PLUS), and you withdrew before completing more than 60% of the enrollment period.
The amount of aid that you earned is determined by the percentage of the semester/enrollment/payment period you completed. The last date of attendance, as reported by your instructors, or the date the you completed the official notification to SFCC of your intent to withdrawal, is used in this determination. That is, if you completed thirty percent of the payment period, you earn thirty percent of the assistance you were originally scheduled to receive. Once you complete more than sixty percent of the payment period, you earn all of your assistance.
To determine the amount of aid you earned up to the time of withdrawal,
1. Divide the number of calendar days you attended classes by the number of calendar days in the enrollment period.
2. Scheduled breaks of 5 days or more are excluded.
3. The percentage derived is then multiplied by the total federal funds that were disbursed (paid to SFCC student account) or that could have been disbursed for the enrollment period. This calculation determines the amount of aid earned by you.
4. The unearned amount (total aid disbursed or that could have been disbursed less the earned amount) must be returned to the U.S. Department of Education.
If there are funds to be returned, they must be returned in the following order until the return amount is exhausted.
- Unsubsidized Stafford Loan
- Subsidized Stafford Loan
- PLUS Loan
- Pell Grant
- Other Title IV programs
If SFCC 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 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.
If you are responsible for returning grant funds, you do not have to return the full amount. The law provides that you are not required to return 50 percent of the grant assistance that you receive that is your responsibility to pay. Any amount that you do have to return is a grant overpayment, and you must make arrangements with SFCC or the Department of Education to return the funds. The amount you owe will be shown in the notification the College will send you.
Schools may exclude unreturnable books or equipment costs, fees that are passed on to other entities, and discretionary costs such as parking fines and service charges from the Return of Title IV Funds calculation.
Title IV funds are awarded to a student under the assumption that the student will attend school for the entire period for which the assistance is awarded. When a student withdraws, the student may no longer be eligible for the full amount of Title IV funds that the student was originally scheduled to receive.
If a recipient of Title IV grant or loan funds withdraws from a school after beginning attendance, the amount of Title IV grant or loan assistance earned by the student must be determined. If the amount disbursed to the student is greater than the amount the student earned, the unearned funds must be returned. If the amount disbursed to the student is less than the amount the student earned, and for which the student is otherwise eligible, he or she is eligible to receive a Post-withdrawal
A student is considered to have withdrawn from a payment period or period of enrollment if:
- in the case of a program that is measured in credit hours, the student does not complete all the days in the payment period or period of enrollment that the student was scheduled to complete;
- in the case of a program that is measured in clock hours, the student does not complete all of the clock hours and weeks of instructional time in the payment period or period of enrollment that the student was scheduled to complete; or,
- for a student in a nonterm or nonstandard-term program, the student is not scheduled to begin another course within a payment period or period of enrollment for more than 45 calendar days after the end of the module the student ceased attending, unless the student is on an approved leave of absence.
Unearned Title IV Funds
By federal law, unearned Title IV funds (Pell, Stafford loans, SEOG) must be returned to the federal government for a student who totally withdraws (official/unofficial) on or before the 60% point of the enrollment period. The amount of return is determined by the following:
- Determine percentage of enrollment period student completed.
- Earned aid = total awarded Title IV aid multiplied by same percentage.
- Unearned aid = earned aid subtracted from total dispersible aid.
- SFCC returns: the total institutional charges incurred by the student multiplied by the unearned percentage of Title IV aid.
- Student returns: unearned aid - If a student received grants, the student's return will be multiplied by 50% after being reduced by the amount of loan funds the student is required to return. This amount is then subtracted from the initial amount of grant funds due from the student.
Once SFCC is aware a student has totally withdrawn from the college, the Financial Aid Office will perform the R2T4 calculation. The Financial Aid Office will then make any appropriate reductions to the student's aid payments based on the recalculation, return the amount the College owes back to the U.S. Department of Education and notifies the student, via a mailed letter,of the R2T4 calculation and any funds they need to pay back to the College and/or to the U.S. Department of Education. The notification to the student explains the student can pay the full amount owed or make payment arrangements with SFCC and/or the Department of Education. If payment is not received or payment arrangements are not made within the specified timeframe SFCC will notify the Department of Education and, as a result of the student's non-action, will be identified as being in overpayment status on the National Student Loan Database System (NSLDS).