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Official policies of St. Mary's University

Return of Title IV Funds (R2T4)

Approver(s):

Executive Council

Authorizes release:

Chief of Staff for the President

Responsible office:

Financial Aid

Review cycle:

Annually or as required

Adopted:

Unknown

Last update:

January 2017

Next review:

June 2017

We understand that your circumstances may change. If you find it necessary to reduce your course load during a semester due to personal, financial or academic reasons, please let us know. We can determine what implications this might have on your financial assistance

The federal government mandates that students who withdraw from all classes may only keep the financial aid they have “earned” up to the time of withdrawal. Title IV funds that were disbursed in excess of the earned amount must be returned by the University and/or the student to the federal government.

If a student withdraws, drops out or is dismissed on or before the 60 percent point in time of the period of enrollment, which is calculated using calendar days, a portion of the Title IV Federal Funds awarded (Pell Grant, FSEOG, Perkins Loan, federal Stafford Loans – subsidized and unsubsidized – and federal PLUS loans) must be returned, according to the Federal Formula for Return of Title IV funds.  This situation could result in the student owing aid funds to the University, government or both.

To determine the amount of aid the student has earned up to the time of withdrawal, the Office of Financial Assistance will divide the number of calendar days the student attended classes by the total number of calendar days in the semester (less any scheduled breaks of 5 days or more). The resulting percentage is then multiplied by the total federal funds that were disbursed (either to the student’s university account or to the student directly by check or direct deposit) for the semester. This calculation determines the amount of aid earned by the student which he or she may keep (e.g., if the student attended 25% of the term, the student will have earned 25% of the aid disbursed). The unearned amount – total aid disbursed less the earned amount – must be returned to the federal government by the University or the student. The Office of Financial Assistance will notify and provide instructions to students who are required to return funds to the government. This calculation must be completed within 45 days of the withdrawal, drop out or dismissal.

Allocating Returned Title IV (Federal) Aid

Funds that are returned to the federal government are used to reduce the outstanding balances in individual federal programs.

Financial aid returned (by the University and/or you or your parents) must be allocated in the following order and will be returned within 14 days of the calculation:

  1. Unsubsidized Federal Direct Loans
  2. Subsidized Federal Direct Loans
  3. Federal Perkins Loans
  4. Federal Graduate Plus (Student) Loans
  5. Federal Parent (PLUS) Loans
  6. Federal Pell Grant
  7. Federal SEOG
  8. Other federal loan or grant assistance
  9. Other state or institutional financial aid programs

If your circumstances require that you withdraw from all classes, you are strongly encouraged to contact the Office of Financial Assistance and your academic advisor before doing so. At that time, the consequences of withdrawing from all classes can be explained and clearly illustrated.  Financial aid counselors can provide refund examples and further explain this policy to you and your parents.

In addition should there be a “post-withdrawal disbursement” (eligibility of Title IV aid) after withdrawal the Office of Financial Assistance will notify the student within 30 days after the calculation and disbursement the funds within 180 days.

You should also be aware that as a recipient of financial assistance, you must comply with the Satisfactory Academic Progress (SAP) Policy, outlined above. By withdrawing, you may not be eligible for financial assistance from St. Mary’s University in the future, because you did not complete a specified number of credit hours for which aid was disbursed.

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