Return of Title IV Funds
According to Federal regulations, the Financial Aid Office must recalculate Federal Title IV financial aid eligibility for students who withdraw from all classes, drop out, or are dismissed, prior to completing at least 60 percent of a semester. Federal Title IV financial aid and all other aid is viewed as 100 percent earned after that point in time.
The withdrawal date is defined as the actual date the student began the institution’s withdrawal process, the student’s last date of recorded attendance, or the midpoint of the semester for a student who leaves without notifying the institution.
The Federal Title IV programs covered under this policy include:
- Federal Pell Grant
- Federal SEOG
- Direct Stafford Loans
- Direct PLUS Loans
The school and the student share the responsibility for returning Title IV aid. The school returns “unearned” Title IV funds that have been paid to the school to cover the student’s institutional charges received from Title IV grant and/or loan programs. If the student owes funds back to the Title IV programs, the institution will advise the student. The student has 45 days from the date of notification from the institution to take action on the overpayment. If the student’s portion of unearned Title IV funds included a federal grant, the student has to pay no more than 50 percent of the initial amount that the student is responsible for returning. Immediate repaying of the unearned loan amount is not required because the student repays the loan to the lender according to the terms or conditions in the promissory note. The institution will advise the lender of the student’s withdrawal within 30 days of determining that the student withdrew.
No additional disbursements may be made to the student for the enrollment period. If the student does not repay the amount owed to the Title IV programs or does not make satisfactory payment arrangements with the U.S. Department of Education, NYCDA will report to the National Student Loan Data System (NSLDS) that the student received an overpayment. The student loses eligibility for further Title IV aid at any school until resolved.
Return of Funds
Federal Title IV financial aid is returned in the order mandated by the U.S. Department of Education. No program can receive a refund if the student did not receive aid from that program. Funds must be returned within 30 days after the date of withdrawal determination. Return of loan funds required by the student for unearned aid are returned (repaid) in accordance to the terms of the loan on the promissory note.
If Federal funds must be returned, this may result in monies owed to the school. The student will be billed accordingly. The order is as follows based on aid offered at NYCDA.
- Unsubsidized Stafford Loan
- Subsidized Stafford Loan
- Federal PLUS Loan
- Federal Pell Grant
- FSEOG
Post-Withdrawal Disbursements
If it is determined that a student is eligible for Federal Title IV financial aid funds that have not been disbursed, grant funds that the student is eligible for will be disbursed first. Federal aid that the student is eligible for will be credited to the student’s account for outstanding charges. If the student has no outstanding charges or if there is a balance due the student after disbursement, NYCDA will notify the student of his/her eligibility for the loans. The student must respond within 14 days of the date of the letter as to whether they want all, part, or none of the loan(s). If the student fails to respond within 14 days, no loan disbursement will be made.