Return to Title IV Procedure for Withdrawn Students

Students receiving federal financial aid who withdraw from or stop attending all courses may be required to return a portion of financial aid received. Federal regulations [HEA Section 484B, 485(a)(1)(F), 34 CFR 668.22], referred to as the Return of Title IV Funds policy, require CCC to calculate a refund and repayment of federal aid received by students who withdraw prior to the 60% point of a term for which he/she has received federal aid. The Title IV (federal) programs under this policy are: Federal Pell Grant, Federal Supplemental Educational Opportunity Grants (FSEOG), and Federal Direct Loans (Subsidized, Unsubsidized and PLUS). According to the Return of Title IV (R2T4) Funds policy, the student is allowed to retain only the amount of Title IV financial aid that was earned. If a student withdraws or stops participating in classes, a portion of the aid received is considered to be unearned and must be returned to the Title IV programs from which it was received. If the R2T4 calculation results in unearned aid that must be returned, both the school and the student are responsible for returning funds.
 
Students wishing to completely withdraw from CCC must initiate the withdrawal process in the Registration and Enrollment Services Office. A student who fails all of their classes in a semester may also be subject to the R2T4 calculation. If a student “earned” at least one of their F’s (i.e. they participated in class until the end of the semester and received an F for poor performance), then no calculation is required. However, if the student failed all classes because they stopped attending at some point in the semester, then a R2T4 calculation is required based on the mid-point of the semester. At the end of the term, the Office of Student Financial Aid will notify students who have received all F's of the required return of funds resulting from the R2T4 calculation.
 
1. Upon determination that a student has withdrawn, the Financial Aid Office will process the R2T4 calculation in accordance with ifap.ed.gov/ifap/titleiv.jsp Treatment of Title IV Funds When a Student Withdraws from a Credit Hour Program. The following steps are used to calculate the amount of aid a student has earned and how much must be returned (if any).

  1. Determination of the withdrawal date.
  2. Determination of the amount of aid the student earned.
  3. Determination of the amount of aid the student did not earn.
  4. Determination of the amount of aid CCC must return.
  5. Determination of the amount of aid the student must return.

For Title IV purposes, the last date of academic attendance is one of the following: the date the formal withdrawal process begins, the date the student otherwise gives official notice of intent to withdraw (e.g., letter, electronically or in-person), the mid-point of the term, or the last documented date of attendance in an academically-related activity (e.g., documented attendance in a class or lab or submission of an assignment in an on-line course).

2. Earned Aid: The percentage of aid the student has earned is equal to the percentage of the semester (payment period) the student has completed. The percentage of the payment period completed is calculated by dividing the total number of calendar days completed (first class day to the last date of attendance) by the total number of calendar days in the term. The percentage of Title IV assistance to which the student is entitled (has “earned”) is equal to this completed percentage up to 60%. If the withdrawal occurs after the 60% point, the percentage is equal to 100%. The amount of aid the student has earned is calculated by multiplying this percentage by the total amount of Title IV aid disbursed (and could have been disbursed) to the student.

3. Unearned Aid: The amount of Title IV aid which must be returned is based on the percentage of unearned aid. That percentage is computed by subtracting the earned aid percentage from 100%. If a student did not receive all of the funds that they earned, they may be due a post-withdrawal disbursement. If the calculation determines that a student is due a post-withdrawal disbursement, the school must obtain the student's permission to disburse any loan funds. Furthermore, the school may use all or a portion of grant funds to pay for any tuition and fee charges that are due.

4. Title IV Aid to be returned by CCC: The College is required to return the lesser of the unearned aid percentage applied to institutional charges or the unearned aid percentage applied to the total Title IV aid received within 45 days of the date of determination of the withdrawal. Unearned aid will be returned to the aid programs in the following order: Unsubsidized Direct Loans, Subsidized Direct Loans, Direct PLUS, Pell Grant, FSEOG. CCC bills the student for any account balance created when Title IV aid is returned.

5. Title IV Aid to be returned by student: The student is required to pay the difference between the amount of unearned aid and the amount returned by the College. If the student’s portion of the unearned aid includes federal grants, they are only required to return the grant amount that exceeds 50% of the original amount received for that semester. If the amount the student owes is less than $50, then no payment is required. Federal regulations allow schools to charge a student for any amount paid on the student's behalf, and CCC will bill the student for any account balance created when Title IV aid is returned. The student's share of loan funds to be returned may be repaid in accordance with the terms of the master promissory note.

Financial Aid Return of Title IV Funds Calculation Sample

A student withdraws from CCC after attending 11 days of a 110 day semester. The student received a $1000 Pell Grant and a $1750 Federal Subsidized Loan. The students’ institutional costs to attend CCC was $1500.

  1. Days attended (11) / Days in semester (110) = Percentage completed (10%);
  2. Total Title IV aid disbursed; $1000 in Federal Pell Grant + $1750 in a Subsidized Loan = $2750 X Percentage Completed (10%) = Earned Aid ($275)
  3. Total disbursed aid ($2750 – Total Earned Aid ($275) = Unearned Aid ($2475)
  4. 100% of Semester - Percentage Completed (10%) = Percentage of Unearned Aid (90%)
  5. Percentage of Unearned Aid (90%) X Institutional Charges ($1500) = Unearned Charges ($1350)
  6. CCC will return the lesser of the Unearned Aid ($2475) or Unearned Charges = ($1350)
  7. CCC’s Share ($1350) will be returned to the Federal Subsidized Loan lender and will be billed to the student.
  8. Unearned Aid ($2475) – CCC’s Share ($1350) = Student’s Share ($1125)
  9. Total amount of Loans ($1750) – CCC’s Share ($1350) = $400; this is the amount the student will return to the Lender according to the terms of the master promissory note (MPN).
  10. Initial amount of unearned Title IV aid due from the student ($1125) – student’s repayment to the student’s loan ($400) = Initial amount of Title IV Grants for Student to Return ($725)
  11. Grant aid disbursed ($1000) X 50% = Title IV Grant Protection ($500) 50% of Grant aid is protected based on HERA law of 2005.
  12. Initial amount of Title IV Grants for Student to Return ($725) – Title IV Grant Protection ($500) = Title IV Grant Funds for the Student to Return ($225)

Based on this calculation, the student will owe back a total of $1975:
• $225 Pell Grant repayment, payable immediately to CCC.
• $1350 CCC tuition repayment, payable immediately to CCC
• $400 Subsidized Loan repayment, payable in the future to their student’s loan servicer, according to the terms of the master promissory note.