Financial Aid Return of Funds Policy
Federal Title IV Funds1
The Higher Education Amendments of 1998, Public Law 105-244 mandate the way funds paid toward a student’s education are to be calculated when a recipient of Title IV funds withdraws from the semester. A statutory federal formula is applied through the 60% point of each semester to determine the amount of Title IV funds a student has earned at the “date of withdrawal”2. (After the 60% point in the semester, a student has earned 100% of the Title IV funds.) If a student who began attendance and has not officially withdrawn fails to earn a passing grade, the institution must assume, for federal Title IV purposes, that the student has “unofficially withdrawn”. If a student does not notify the institution that he/she has withdrawn, the date that the student withdrew would be the date the institution became aware that the student ceased to attend classes.
Repayment of Unearned Aid
The amount of unearned Title IV aid disbursed3 to the student must be returned. The institution and the student share the responsibility in returning funds. (The division of returning funds will depend on what funds were received and how they were disbursed.) The institution’s share is allocated among the Title IV programs, in an order specified by statute, before the student’s share. Students only owe grant overpayments if the overpayment exceeds 50% of the Title IV grant aid received. Students are not required to return grant overpayments of $50 or less.
Refunds and repayments will be distributed to the appropriate Title IV, HEA programs in the following order:
- Direct Unsubsidized Stafford Loan
- Direct Subsidized Stafford Loan
- Direct PLUS Loan
- Federal Pell Grant
Time Frame for Returning Funds
The institution must return its share of unearned Title IV funds no later than 45 days after it determines that the student withdrew. Notification to the student will be sent describing the calculation, what the institution will return and their obligations. If the student has borrowed a student loan, the student will return their share of unearned aid attributable to a loan under the terms and conditions of the promissory note.
Post-withdrawal Disbursements of Aid
A student who earned more aid than was disbursed prior to withdrawal could be eligible for a post-withdrawal disbursement. Post-withdrawal disbursements must be made from grant funds before loans. Saint Francis Medical Center College of Nursing (SFMC-CON) may credit grant disbursements toward unpaid institutional charges for current year only. SFMC-CON will notify a withdrawn student prior to disbursing a loan as a post-withdrawal disbursement. SFMC-CON will explain the student’s obligation to repay the funds and confirm the loan funds are still required by the student. Any refund due to the student as a result of a post withdrawal disbursement will be mailed to the student within 30 days of the withdrawal date. The student has 14 calendar days to respond to the Student Finance Office. If the funds are declined by the student or parent, or response is not received within 14 days, no post-withdrawal disbursement will be processed.
Statutory Federal Formula
Earned Percentage of Title IV Aid
Determine the calendar days completed in the semester of enrollment divided by the total calendar days in the semester of enrollment (exclude scheduled breaks of 5 days or more AND days that the student was on an official approved leave of absence4).
Unearned Percentage of Title IV Aid
100% Aid Disbursed – % Earned Aid = % Unearned Aid (Title IV Return)
% Earned Aid: Days Completed / Total Days in Semester
1 Federal Title IV Funds (at SFMC-CON) - Pell Grant, Federal Stafford Student Loans (Subsidized and Unsubsidized) and Federal PLUS loan.
2 Date of withdrawal – A student who wishes to withdraw from a semester must request the appropriate form from the Registrar or Associate Dean and obtain the necessary signatures. Non-attendance or verbal notification to an employee other than the Registrar or Associate Dean does not constitute a withdrawal. The date of withdrawal is determined by the Registrar.
3 Disbursed – Aid that has been applied to the student’s account for tuition, fees and other allowable charges and/or aid that was disbursed directly to the student or parent (PLUS loan).
4 Leave of Absence – The student must follow the leave of absence policy as written in College publications (Catalog, Student Handbook, SFMC-CON Website).