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Return of Title IV Funds

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 a 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, the excess funds must be returned.

The amount of assistance that you have earned is determined on a pro-rated basis.  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 have completed more than sixty percent of the payment period, you earn all of your assistance.

If you received excess funds that must be returned, SFCC  must return a portion of the excess equal to the lesser of:

• your institutional charges multiplied by the unearned percentage of your funds, or
• the entire amount of the excess funds.

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.

If there are SFA funds to be returned, they must be returned in the following order until the return amount is exhausted.

1.      Unsubsidized FFEL Stafford Loan
2.      Subsidized FFEL Stafford Loan
3.      FFEL PLUS Loan
4.      Pell Grant
5.      SEOG
6.      Other Title IV programs

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.