Title IV Financial Aid Recipients Refund and Repayment Policy

Procedures to officially withdraw from college

A student who chooses to officially withdraw from NIACC before the end of the enrollment period is defined as one who notifies the NIACC Registrars’ office of their intent to withdraw. Official notification can be received in written form, in person, or through email to the NIACC Registrars’ Office. Additional information, including deadlines for official withdrawal, may be accessed in the NIACC Student Handbook.

A student may be considered as an Unofficial Withdrawal if it is determined that the student has ceased attending his/her registered course(s) without completing the official process.

The refund policy follows Title IV funds as required by 668.22

The refund schedule for recipients of Title IV Financial Aid (Pell, loans, SEOG) will be calculated in accordance with Public Law 105-244, The Higher Education Amendments of 1998 and section 668.22, known as the Return to Title IV Funds regulations.

The law requires that if a student receives financial aid and withdraws either officially or unofficially from school during the payment period or period of enrollment in which the recipient began attendance, the school must calculate the amount of SFA Program assistance the student did not earn and those funds must be returned. This calculation is applicable until the student has completed more than 60 percent of the payment period or period of enrollment. Once the student has completed more than 60 percent, all financial aid is considered earned.

Determining Last date of attendance for Official and Unofficial withdrawals

Withdrawal dates for an official withdrawal are determined by the NIACC Registrars’ office and communicated to the NIACC Financial Aid office as to when the student notifies them of their intent to withdraw.

If a student stops attending all classes and fails to notify the Registrar’s Office this is considered an unofficial withdrawal. When the college determines that the student ceased attending all classes, NIACC asks instructors for the last date of attendance. When this documentation is gathered, NIACC may use this date as the student’s unofficial date of withdrawal to calculate earned aid for the Return to Title IV Funds.

Leave of Absence policy

NIACC does not currently have a Leave of Absence policy or process for the purposes of a Return to Title IV calculation or an academic leave of absence policy.

There is a NIACC Education Services Procedure formatted to support military members that are being called to active duty in the United States Armed Forces (see ES 4460). This policy outlines the steps a student must take if called to active duty and the options available to the student.

Process for post-withdrawal disbursements

A student who had their attendance confirmed may be eligible for a Post-Withdrawal disbursement if, prior to withdrawing, the student earned more federal financial aid than was disbursed. If a student is eligible for a Post-Withdrawal disbursement for Title IV funds, the student will be notified by mail of their options. They will have 14 days from the date of the written notice to accept their post withdrawal disbursement. If the student does not respond to the written notice, aid will be cancelled after the 14 days has elapsed. If the student elects to have their disbursement (grants or loans), NIACC may use all or a portion of the disbursement for tuition and fees, if the post-withdrawal disbursement results in a credit balance, a check will be issued to the student. It is important to understand that accepting a post-withdrawal disbursement of loan funds will increase overall student loan debt and must be repaid in accordance of the Master Promissory Note. Additionally, accepting the disbursement of grant funds will reduce the remaining amount of grant funds available to the student should the student continue his/her education at a later time.

Process for calculation of amount of title IV assistance earned & determining the percentage of payment period

To calculate the amount of Title IV assistance that a student has earned, NIACC will calculate the percent of the “payment period” (term) completed, take the number of calendar days the student attended in their payment period for the term and divide that by the number of calendar days in the payment period for the term (less scheduled breaks of at least five consecutive days).

• A payment period for students in at least one course spanning the full term would be the full term. (Fall and Spring terms – 16 weeks each: Summer is 14 weeks)
• A payment period for a student in only one module (courses that do not span the entire length of the term) would be the length of the module (Fall or Spring term = 10 week, 8 week, or 4 week modules: Summer term has 4 or 6 week modules).
• A payment period for a student in a combination of two modules would be the length of the combination (Fall and Spring term could have two 8 week modules to equal 16 weeks: Summer term has a two 4 week and one 6 week module to equal 14 weeks). A student who dropped all courses in the second module before attending the second module would have a payment period of the first module.

School’s responsibility for returning unearned aid

The refund schedule for recipients of Title IV Financial Aid will be calculated in accordance with Public Law 105-244, The Higher Education Amendments of 1998.

The law requires that if a student receives financial aid and completely withdraws from school during the payment period or period of enrollment (officially or unofficially) in which the recipient began attendance, the school must calculate the amount of SFA Program assistance the student did not earn and those funds must be returned.

• Recalculation is based on the percent of earned aid using the following formula:
  • Percent earned = Number of days completed up to the withdrawal date/total days in the semester.
• Federal financial aid is returned to the federal government based on the percent of unearned aid using the following formula:
  • Aid to be returned = (100% – percent earned) X the amount of aid disbursed toward institutional charges.

Institutions are required to return SFA funds on behalf of recipients in the following order:

1. Unsubsidized Federal Direct Loans
2. Subsidized Federal Direct Loans
3. Direct PLUS Loans
4. Federal Pell Grant
5. Federal SEOG
6. Other Title IV Assistance

Student’s responsibility for returning unearned aid

In determining the amount of funds the student must return, the formula is as follows: Amount of Unearned Title IV Aid – School’s Responsibility = Student’s Responsibility.

Students must return funds in the following order:

1. Unsubsidized Federal Direct Loans*
2. Subsidized Federal Direct Loans*
3. Federal Direct PLUS Loans*
4. Federal Pell Grant x 50%
5. Federal SEOG x 50%
6. Other Title IV Assistance

* In accordance with terms of promissory note.

When aid is returned, the student may owe a bill to NIACC. The student should contact the Business Office to make payment arrangements.

The college is required to return Title IV funds as soon as possible but no later than 45 days from the date of the institution’s determination that the student withdrew. Students will be notified in writing or any adjustments made.

Examples showing how refunds & institutional refunds work

Examples of Title IV Refund Policy

Example #1 Official Withdrawal:

A) Student was enrolled full-time for courses that spanned the full 16 weeks. After attending all courses, the student withdraws on the 15th day after the start of the semester which is 100 days long. Student earns 15% of his/her federal aid. 85% of federal aid is considered to be unearned. The unearned amount must be repaid to loan and/or grant programs.

Student received a Pell grant of $543 for the semester and original institutional charges were $1,306.35.

$543 X 15% = $81.45, the amount that NIACC can apply to charges.

$543 – $81.45 = $461.55, the amount that NIACC must return to the federal government.

According to NIACC’s Tuition Refund policy, the student is not entitled to a refund of charges.

Charges ……………………………………………………………………………..$1,306.35
Earned aid …………………………………………………………………………….$81.45
Adjusted balance due …………………………………………………………….$1,224.90

Total amount student will owe = $1,224.90 NIACC is responsible for returning $461.55 in unearned aid to the Department of Education. The student is sent a written notice of the R2T4 calculation, outlining their responsibility.

B) In the case where a student enrolled full-time for courses that span the 16 weeks, after the student had attended all courses, the student officially withdrew from all courses on day 65. The original charges for the term were $3,158.50. The funds disbursed to the student account were $2,960 in Pell grant, $300 in SEOG grant and $1,732 in Federal Direct Subsidized loan. The credit balance of $1,833.50 was paid to the student after attendance verification.

• There were 100 days in the payment period
• 65 divided by 100 = .65 or 65%
• As 65% is over 60%, no return of funds is required.

Example #2 Unofficial Withdrawal:

Student was enrolled full-time for courses that spanned the full 16 weeks. The student began attendance in all courses. Student received a Pell grant of $2,960 and $1,198 in Federal Direct Subsidized Loan for the semester and original institutional charges were $2,802.25. The credit balance was paid to the student after attendance verification. After the midterm, it was discovered that the student had unofficially withdrawn. The student’s last date of attendance as reported by his /her instructors was 39 days into the term.

• There are 100 days in the payment period (or term).
• 39 divided by 100 = .39 However, because this is an unofficial withdrawal, NIACC is allowed to utilize the mid-point of the payment period to determine the unearned aid percentage, or 50%.
• 100% – 50% = 50% unearned
• Apply the percentage completed (earned), 50.00 to:
  • Title IV (federal) aid disbursed: $4158 x 50% = $2079 earned aid
  • $4158 minus $2079 = $2079 unearned aid
• Apply the unearned percentage 50% to:
  • Total charges for the term: $2802.25 times 50% = $1401.13 unearned charges

NIACC is responsible for returning the lesser of unearned charges or unearned aid to the Department of Education. The student is sent a written notice of the R2T4 calculation, outlining their responsibility.

Example #3 Post Withdrawal Disbursement:

Student was enrolled full-time for courses that spanned the full 16 weeks. The original institutional charges for the term were $2432.50. The student began attendance in each course, but officially withdrew on the 3rd day and received 100% refund of institutional charges. The funds disbursed (credited) to the student account were: $0 Pell grant. However, the student could have received $88.80 from the Pell should he/she continued enrollment.

There were 100 days in the payment period

3 divided by 100 – .003 or 3%

Apply the percentage completed (earned), 3% to:

Title IV (federal) aid that could have been disbursed: $2960 x 3% = 88.80 earned aid

Total charges for the term: $0 (the student was provided 100% refund).

The student earned more federal financial aid than was disbursed. The post-withdrawal disbursement for Title IV funds will be communicated to the student. The student has 14 calendar days to accept this Post Withdrawal disbursement. Title IV funds will be processed for the student and a refund will be issued for the credit balance.

Title IV Grant Overpayment

If a student is required to repay an unearned grant (overpayment), the student will remain eligible for Title IV aid for up to 45 days after the student has been notified of the overpayment. The student may resolve the overpayment by repaying the amount in full to NIACC, by making satisfactory payment arrangements with NIACC, or by making satisfactory payment arrangements with the Department of Education.

Questions Concerning Return of Financial Aid Title IV Funds:

Contact the NIACC Financial Aid Office by calling 1-888-466-4222 ext. 4168. As the regulations governing Return of Title IV aid are subject to change, refer to the Financial Aid website for up-to-date information.