Return of Title IV Funds Policy
Return of Title IV Funds Information
Federal regulations require Title IV financial aid funds to be awarded under the assumption that a student will attend the institution for the entire period in which federal assistance was awarded. When a student withdraws from all courses for any reason, including medical withdrawals, he/she may no longer be eligible for the full amount of Title IV funds that he/she was originally scheduled to receive. The return of funds is based upon the premise that students earn their financial aid in proportion to the amount of time in which they are enrolled. A pro-rated schedule is used to determine the amount of federal student aid funds he/she will have earned at the time of the withdrawal. Thus, a student who withdraws in the second week of classes has earned less of his/her financial aid than a student who withdraws in the seventh week. Once 60% of the semester is completed, a student is considered to have earned all of his/her financial aid, and will not be required to return any funds.
Federal law requires schools to calculate how much federal financial aid a student has earned if that student completely withdraws, stops attending before completing the semester, or does not complete all sessions or parts of term (i.e. courses which are not scheduled for the entire semester or payment period for which he/she has registered at the time those sessions/parts of term began).
Based on this calculation, East Stroudsburg University students who receive federal financial aid and do not complete their classes during a semester or term, could be responsible for repaying a portion of the aid they received. Students who do not begin attendance must repay all financial aid disbursed for the term.
Returns are allocated in the following order:
- Unsubsidized Federal Direct Loans
- Subsidized Federal Direct Loans
- Federal Perkins Loans
- Federal Direct PLUS (Parent) Loans
- Federal Pell Grants for which a Return of Funds is required
- Federal Supplemental Opportunity Grants for which a Return of Funds is required
- Other assistance under this Title IV for which a Return of funds is required (e.g. LEAP)
Students who receive federal financial aid must “earn” the aid they receive by staying enrolled in classes. The amount of federal financial aid assistance the student earns is on a pro-rated basis. Students who withdraw or do not complete all registered classes during the semester may be required to return some of the financial aid they were awarded.
Institutions are required to determine the percentage of Title IV aid “earned” by the student, and to return the unearned portion to the appropriate aid programs. Regulations require schools to perform calculations within 30 days from the date the school determines a student’s complete withdrawal. The school must return the funds within 45 days of the calculation. The Return of Title IV aid calculation process and return of funds is completed by the Office of Student Financial Aid.
For example, if a student completes 30 percent of the payment period, they earn 30 percent of the aid they were originally scheduled to receive. This means that 70 percent of the scheduled award remain “unearned” and must be returned to the federal government. Once 60% of the semester is completed, a student is considered to have earned all of his/her financial aid and will not be required to return any federal funds.
If you have been a recipient of a Federal Student Loan you must complete the exit counseling at www.studentloans.gov. You can find comprehensive information about your financial aid at www.nslds.ed.gov.