Federal Return of Title IV Funds Policy

Withdrawals

When a student who is a Title IV recipient withdraws, there are two policies related to finance that the student should be familiar with.

The first is STC’s Tuition Refunds Policy, which is located in the Financial Information
Section of the catalog and at https://finance.southtexascollege.edu/businessoffice/cashiers/refunds.html.

The second policy is the U.S. Department of Education’s Return of Title IV Funds policy, which is described below.

These two processes are managed by different offices and have different requirements and deadlines and can be a little confusing. If you have questions after reviewing the Financial Information, Tuition Refunds Policy section please contact Cashiers Office at (956) 872-3455; if you have questions after reviewing the Return of Title IV Funds information please contact STC Student Financial Services Office at (956) 872-8375. Both departments may be reached at 855-468-6782.

Policy Summary

Federal Regulations specify how South Texas College must determine the amount of Title IV program assistance that you earn if you withdraw or are withdrawn from school. The Title IV Programs that are covered by this policy at South Texas College are the Federal Pell Grant, Iraq and Afghanistan Service Grants and the Federal Supplemental Educational Opportunity Grants (FSEOG).

Though your aid is posted to your account at the start of each period, you earn the funds as you complete (attend) the period. If you withdraw during semester or payment period, the amount of Title IV program assistance that you have earned up to that point is determined by a specific formula. If you received (or the school received) less assistance than the amount that you earned, you may be able to receive those additional funds in the form of a post-withdrawal disbursement. If you received more assistance than you earned, the excess funds must be returned by the school and/or you.

The amount of assistance that you have earned is determined on a pro rata basis. For example, if you completed 30% of your semester or payment period, you earn 30% of the assistance you were originally scheduled to receive. Once you have completed more than 60% of the payment period, you earn all the assistance that you were scheduled to receive for that period. Under Federal Regulations, the action of calculating the percentage earned is referred to as the Return of Title IV Funds calculation.

If you did not receive all of the funds that you earned, you may be due a post-withdrawal disbursement. The school may automatically use all or a portion of your post-withdrawal disbursement of grant funds for tuition and fees. The school needs your permission to use the post-withdrawal grant disbursement for all other institutional charges. If you do not give your permission (some schools ask for this when you enroll), you will be offered the funds. However, it may be in your best interest to allow the school to keep the funds to reduce your debt at the school.

There are some Title IV funds that you were scheduled to receive that cannot be disbursed to you once you withdraw because of other eligibility requirements. If you receive (or the school receives) excess Title IV program funds that must be returned, South Texas College must return a portion of the excess funds equal to the lesser of:

your institutional charges multiplied by the unearned percentage of your funds, or
the entire amount of excess funds.

The school must return this amount even if it didn’t keep this amount of your Title IV program funds. If the school is not required to return all of the excess funds, you may be required to return the remaining amount. Any amount of unearned grant funds that you must return is called an overpayment. Detailed information on overpayments is discussed in the Return of Title IV Funds Calculation – When Money is owed to the School section below.

The requirements for Title IV program funds when you withdraw are separate from any refund policy that the school may have. Therefore, you may still owe funds to the school to cover unpaid institutional charges. The school may also charge you for any Title IV program funds that the school was required to return. If you don’t already know South Texas College’s refund policy, you can ask for a copy or visit https://finance.southtexascollege.edu/businessoffice/cashiers/refunds.html. South Texas College can also provide you with the requirements and procedures for officially withdrawing from school or you can visit
https://catalog.southtexascollege.edu/scholastic-regulations/academic-information/.

If you have questions about your Title IV program funds, you can call the Federal Student Aid Information Center at 1-800-4-FEDAID (1-800-433-3243). TTY users may call 1-800-730-8913. Information is also available on Student Aid on the Web at https://studentaid.gov.

Process for students who withdraw themselves

Students who go through the process of officially withdrawing themselves from school do so through the Office of Admissions and Records. Information on South Texas College’s Withdrawal Procedures can be found at https://catalog.southtexascollege.edu/scholastic-regulations/academic-information/.

The process for students who are withdrawn or who do not initiate the withdrawal process

The Return of Title IV funds process is different for students who do not follow the process to officially withdraw and are withdrawn or dropped by the school, (unofficial withdrawals). Department of Education states that students who do not follow the official withdrawal process, have earned 50% of the Federal Student Aid that they were awarded for the period that they were withdrawn from.

Withdrawals from programs offered in modules (Minimesters)

For all programs offered in modules, called minimesters at South Texas College, a student is a withdrawal for Title IV purposes if the student ceases attendance at any point prior to completing the payment period unless student meets one of the following exemptions:

Student completes all of the requirements for graduation;
Student successfully completes a class1 or multiple classes that comprise at least 49 percent of the days in the term; or
Student successfully completes a class or multiple classes that comprise at least half-time enrollment.

Note that the earning of a passing grade in a minimester does not always mean that a Return to Title IV calculation will not be performed.

Determining Amount of Title IV funds earned

To determine the amount of Title IV funds earned as of the date of the withdrawal, we calculate the percentage of the period completed, as follows:

Divide the number of calendar days completed in the period as of the day the student withdrew, by the total number of calendar days in the period.

The total number of calendar days in a period includes all days within the period, except for institutionally scheduled breaks of five or more consecutive days. The day the student withdrew is counted as a completed day. This percentage is multiplied by the amount of Title IV Federal Student Aid that was disbursed to the student for the period. The result is the amount of aid that the student earned. Students attending at least one
semester course (not a minimester), who reach the 60 percent point in a period, will have earned 100 percent of their Federal aid and no adjustment is required.

¹Successful completion of a class is the earning of a passing grade in that class

When a student fails to earn at least one passing grade

As per U. S. Department of Education, students who do not earn at least one passing grade in a period, are considered to have withdrawn from school. Note that the earning of a passing grade in a minimester does not always mean that a Return to Title IV calculation will not be performed.

Non-passing grades for financial aid purposes are: Withdrawn courses, Failed courses, courses with Incomplete grades, NP grades, IP grades and courses with No grades.

For example: if a student attempts three courses, withdraws from one course with a “W” and earns “Fs” for the other two courses, or if student earns all “Fs”, the Student Financial Services Office must assume that the student withdrew from school. The Student Financial Services Office is required to re-calculate their eligibility and remove some of the financial aid funds that were disbursed on their student account. In most cases, students will end up owing South Texas College hundreds of dollars.

At South Texas College, the withdrawal date for students who do not earn at least on passing grade is the 50 percent point of the period, if a last date of attendance was not provided by any of the instructors. If a last date of attendance was provided by at least one instructor, we will use the latest date of attendance to calculate the days completed and divide that, by the total days in the payment period. The result will be the Earned Percentage that we will use to recalculate eligibility, (please see examples below).

For students in this situation, the only relief available is related to the date when they stopped attending school classes. If the student participated in a verifiable, academically-related activity past the 60 percent point of the semester (check with the Student Financial Services Office for dates) and proof of this can be collected from the
school, then the student would have earned 100 percent of the funds that student was scheduled to receive.

The U. S. Department of Education has defined acceptable academically-related activities as class attendance, examinations or quizzes, tutorials, computer-assisted instruction, academic conferences, completing an academic assignment, paper, or project, or attending a school-assigned study group. Students may not provide
documentation of these activities; documentation must come from the instructor.

Online Classes (Distance Education/Distance Learning)

In a distance education context, documenting that a student has logged into an online class is not sufficient, by itself, to demonstrate academic attendance by the student; a definition of attendance for financial aid purposes is provided under the Regulations section of our website at https://studentservices.southtexascollege.edu/finaid/attendance_definition.html.

Notification of Return of Title IV Funds Calculation Results

When a Return of Title IV funds calculation is performed for withdrawals, either official or unofficial and for non-passing grades, the Student Financial Services Office will send a letter to students, informing them of the calculation, consequences and their responsibilities.

Return of Title IV Funds Calculation – When Money is owed to the School

If students withdraw or are withdrawn from all of their classes after the 20th class day of a regular semester/period or the designated end of the refund period of a minimester or summer session, South Texas College will not adjust the cost of tuition and fees, (please reference the Tuition Refunds Policy discussed previously).

When a Return of Title IV funds calculation is performed and the school is not required to return funds, the student may be required to return an amount. Any amount of unearned grant funds that student must return is called an overpayment. The maximum amount of a grant overpayment that student must repay is half of the grant funds that student received or were scheduled to receive. Student does not have to repay a grant overpayment if the original amount of the overpayment is $50 or less. South Texas College will notify student if they must repay part of the grant; after notified, student will have 45 days to make payment arrangements with the school. If the school is unable to collect the funds owed, the overpayment will be referred to Department of Education for collection.

Overpayments

Students who have grant overpayments may contact Default Resolution Group by calling 1-800-621-3115 or by writing to Default Resolution Group at the following address:

U.S. Department of Education
Default Resolution Group
P.O. Box 5609
Greenville, Texas 75403

Three Examples of Return of Title IV funds calculations:

Example #1

Barbara was enrolled in for 12 credit hours at STC for the fall semester. When Barbara began classes she received a Federal Pell Grant. She withdrew from her classes 53 days into the semester. Her bill for tuition and fees was $1250. There are a total of 159 calendar days in the semester, so Barbara earned 33.3 percent of her Title IV aid (53 days completed divided by 159 total days in the payment period). Barbara received a total of $2675 in Federal Pell Grant for the fall semester. She received a check for the balance of Pell Grant funds in excess of the cost of school after census day.

To determine the amount of Pell Grant funds that Barbara earned, we must multiply the percentage earned by the amount she was eligible to receive.

33.3% X $2675.00= $890.78

Since Barbara was enrolled for 33.3 percent of the fall semester, according to U.S. Department of Education regulations, she has earned $890.78 of her Pell Grant. The Department of Education requires that STC return unearned funds from funds that Barbara used to pay for her tuition and fees. Because Barbara withdrew after the 20th day of class, there will be no reduction of the cost of tuition and fees. Barbara will be responsible to repay STC unearned funds because she withdrew and the funds are no longer available to cover the cost of her tuition and fees.

Example #2

David was enrolled for 12 credit hours in the Spring semester; he attended a few weeks of his classes and decided to leave school. He was eligible for $550.00 in Federal Pell Grant which was posted to his student account to help pay for his tuition. His cost for tuition and fees was $650.00. He did not inform STC of his decision to withdraw, and did not follow the process for withdrawing from school. He was dropped from all of his classes for non-attendance, and the Financial Aid office was notified of the withdrawal. Because student did not follow procedures to officially withdraw, this is considered an unofficial withdrawal and Department of Education requires that STC perform the calculation at 50 percent.

To determine the amount of Pell Grant funds that David earned, we multiply 50 percentage earned by the amount he was eligible to receive.

50.0% X $550.00 = $275.00

Since calculation was done at 50 percent for the spring semester, according to U.S. Department of Education regulations, he has earned $275.00 of his Pell Grant. The Department of Education requires that STC return unearned funds from funds that David used to pay for his tuition and fees. Because David withdrew after the 20th day of class, there will be no reduction of the cost of tuition and fees. David will be responsible to repay STC unearned funds because he was withdrawn and the funds are no longer available to cover the cost of his tuition and fees.

Example #3

Danny was enrolled in 6 credit hours for the spring semester, was not withdrawn and did not initiate the withdrawal process. He earned all Fs for the spring semester. He was eligible for $1,325.00 in Federal Pell Grant. The Financial Aid office was unable to find documentation showing that he had attended past the 60 percent point of the semester, and consequently was required to perform a Return of Title IV funds calculation at 50
percent.

As per U.S. Department of Education regulations, Danny is entitled to 50 percent of his $1,325.00 Pell Grant award. He earned $662.50 for the semester:

50.0% X $1,325.00

STC will return unearned funds and Danny will be responsible to repay STC those unearned funds.

The Formula

Example of a Return of Title IV Funds Calculation using the Formula

This example is provided so that a student can derive an approximation of what he would owe if he were to withdraw or if he were to receive non-passing grades, (for nonpassing grades, instructors will provide last date of attendance), in a payment period:

Tuition and Fees: $1,000
- Tuition and Fees will be the initial tuition and fees. Fees will vary depending on courses taken but typically will include:
  - 30004000 Level Course Fee
  - Learning Support Fee
  - Information Technology Fee
  - Electronic Distance Education Learning Fee
  - Hybrid Course Fee
  - Course Repeat Fee
  - Student Registration Fee
  - Drop/Add Fee
Federal Financial Aid (FA) Disbursement Total: $2,000.
Student withdrew from classes 34 days into the semester; student was not registered in minimesters.
There are a total of 110 calendar days in the semester.
Student earned 31 percent of his Federal Aid:
- 34 days completed divided by 110 total days in the payment period.
  - Earned Percentage: 31%
Then Earned Percentage is multiplied by Federal FA Disbursement Total = Earned funds
- using above numbers: 31% X $2000 = $620. $620 being Earned funds
Then Federal FA Disbursement Total minus Earned funds = X
- using above numbers: $2000 – $620 = $1380. $1380 being X
100% minus Earned Percentage = Unearned Percentage
- using above numbers: 100% - 31% = 69%. 69% being Unearned Percentage
Then Tuition and Fees in the term times Unearned Percentage = Y
- using above numbers: $1000 X 69% = $690. $690 being Y
Then the result of, if X is less than Y then choose X, else choose Y; this is the Amount for the school to Return
- using above numbers: Is $1380 < $690? No, then choose $690; this is the Amount for school to return: Y= $690 dollars.
The Amount for School to Return is subtracted from FA Disbursement Total
- using above numbers it would be: $2000 – $690 = $1310

The $690 will be the funds for South Texas College to return to Department of Education, which student will make arrangements to pay, to South Texas College; there may be other charges included but those are not discussed here.

The $1310 will be the new adjusted Federal Pell Grant amount that will show in student’s JagNet account for the semester/period he withdrew from.