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 http://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 1-800-742-7822.

Policy Summary
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 (FSEOGs). The Higher Education Amendments of 1998, Public Law 105-244 (the Amendments of 1998) substantially changed the way funds paid toward a student’s education are handled when a recipient of Title IV funds withdraws from school. If a Title IV recipient withdraws from school after beginning attendance, (Note that 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 Eligibility Issues section of our website at http://studentservices.southtexascollege.edu/finaid/attendance_definition.html, the amount of aid earned by the student must be determined; if the amount disbursed to the student is greater than the amount the student earned, unearned funds must be returned. If the amount disbursed to the student is less than the amount the student earned, and for which the student is otherwise eligible, he or she is eligible to receive a post-withdrawal disbursement of the earned aid that was not received.

Process for students who withdraw themselves
For students who go through the process of officially withdrawing themselves from school, a simple calculation is used to determine the amount of Title IV funds a student has earned as of the date he or she withdraws, (information on South Texas College’s Withdrawal Procedures can be found at http://studentservices.southtexascollege.edu/admissions/academic_info.html#with). The percentage of the period completed is determined by dividing the number of calendar days completed in the semester as of the day the student withdrew, by the total number of calendar days in the semester. The total number of calendar days in a semester includes all days within the term, 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 semester. The result is the amount of aid that the student earned. Once the student reaches the 60 percent point in a semester, they have earned 100 percent of their Federal aid and no adjustment is required.

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. For example, the withdrawal date for students who have withdrawn after beginning attendance is the date that the student was withdrawn. Students who do not initiate the withdrawal process will be withdrawn up to the 50 percent point of the semester. If the student is withdrawn on or after the 50 percent point of the semester, the percentage used to calculate the amount of aid that the student has earned will always be 50 percent. This includes students who are withdrawn by the Student Assessment Center.

Withdrawals from programs offered in modules (Mini-mesters)
Previously, if a student attending a standard, term-based program offered in modules (at South Texas College these are known as mini-mesters), ceased attendance after completing one module, the student was not considered to have withdrawn, and the school was not required to perform a Return calculation. This is no longer the case; under the October 29, 2010, final regulations, for all programs offered in modules, a student is a withdrawal for Title IV purposes if the student ceases attendance at any point prior to completing the payment period or period of enrollment, unless the school obtains written confirmation from the student at the time of the withdrawal that he or she will attend a module that begins later in the same payment period or period of enrollment.

In addition, for a student in a non-term or nonstandard-term program offered in modules, a student is considered to have withdrawn from the program if the student is not scheduled to begin another course within the payment period or period of enrollment for more than 45 calendar days after the end of the module the student ceased attending, unless the student is on an approved leave of absence. So, for a student in a non-term or nonstandard term program offered in modules who ceases attendance, the student is a withdrawal for Title IV purposes unless the school obtains written confirmation from the student at the time of the withdrawal that he or she will attend a module that begins later in the same payment period or period of enrollment, provided the later module the student will attend begins no later than 45 calendar days after the end of the module the student ceased attending.

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 per semester are considered to have withdrawn from school. 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 he or she 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 semester if a last date of attendance was not provided by any of the instructors. If a last date of attendance was provided, we will use the latest date of attendance to calculate the days completed and divide that by the total days in the semester or 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 then the Student Financial Services Office does not have to perform the calculation. The U. S. Department of Education has defined acceptable academically-related activities as class attendance, examinations or quizzes, tutorials, computer-assisted instruction, academic advising or counseling, 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 either an instructor or in the case of academic advising, the office of Advisement and Mentoring Services.

RETURN OF TITLE IV FUNDS CALCULATION RESULTING IN MONEY OWED TO SOUTH TEXAS COLLEGE
If students withdraw or are withdrawn from all of their classes after the 20th class day of a regular semester or the designated end of the refund period of a shorter term, 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 aid that was used by the student to pay for tuition, fees, or other institutional charges is returned, students become responsible to repay those funds to South Texas College. The debt must be repaid before the student will be allowed to register for a future semester.

Grant 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 $846.25 of the unearned funds from the 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 $846.25 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, 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. Joe was dropped from all of his classes for non-attendance, and the Financial Aid office was notified of his withdrawal. The date that he was withdrawn was at the 45 percent point of the semester.

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

45.0% X $550.00 = $247.50

Since Joe was enrolled for 45.0 percent of the spring semester, according to U.S. Department of Education regulations, he has earned $247.50 of his Pell Grant. The Department of Education requires that STC return $357.50 of the unearned funds from the funds that Joe used to pay for his tuition and fees. Because Joe withdrew after the 20th day of class, there will be no reduction of the cost of tuition and fees. Joe will be responsible to repay STC $357.50 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. The Financial Aid office was unable to find documentation showing that she had attended past the 60 percent point of the semester, and consequently was required to perform a Return of Title IV funds calculation.

As per U.S. Department of Education regulations Danny is entitled to 50 percent of her $1,325.00 Pell Grant award. Danny will be responsible to repay STC $300.

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 non-passing 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 mini-mesters.
  • 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 on student’s behalf and will be what student will owe; there may be other charges included by the institution 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.