Title IV Return of Funds
This requirement applies only to students who received federal student aid, and are withdrawing prior to completing 60 percent of the period (semester) for which the aid was provided.
Federal regulations require that Purchase College use a Return of Title IV Funds calculation in cases where a student receiving Title IV financial aid (e.g. Pell Grant, Direct Loans, Perkins Loan, etc.) discontinues study during a given semester.
While there is no academic penalty associated with the ‘W’ grade, there may be financial aid implications. If you discontinue study (withdraw from all courses in the semester) and have previously been awarded these funds, the college must determine if these funds are required to be returned to the appropriate financial aid programs. Any student who received federal Title IV financial aid funding will have their eligibility recalculated in order to determine:
- the amount of financial aid the student is eligible to retain; and
- the amount of “unearned financial aid” that must be returned to the U.S. Department of Education
In addition, the calculation will based on the student’s actual “withdrawal date” and not necessarily the date the student withdrew from all of their courses.
What is Return of Title IV Funds Calculation?
The federally mandated process by which a school calculates the amount of federal funds to be returned for a Title IV aid recipient who withdraws or who ceases attendance during a semester. The calculations may result in a reduction of the student’s Title IV loan and grant aid to reflect the percentage of the semester that the student attended, if he or she attended 60 percent or less of the semester. The Return of Title IV calculation is based on the following:
- the number of days the student attended;
- the institution charges assessed;
- the total amount of Title IV aid awarded, accepted and or disbursed;
- furthermore, the school, and the student may be required to return any “unearned” federal assistance.
Students will receive email notification to their Purchase email address and mail to their home address indicating the type and amount of aid returned to the U.S. Department of Education.
Determining the amount of Unearned Aid to be returned:
Total Disbursable Title IV Aid (Federal Financial Aid)
Minus Earned Title IV Aid (Federal Financial Aid)
Equals The Disbursable Title IV Aid (Federal Financial Aid)
Total Disbursable Title IV Aid (Federal Financial Aid):
This is the total Title IV aid (Federal Financial aid) that has been, or could have been disbursed to the students account for that semester.
Earned Title IV Aid (Federal Financial Aid):
A student’s “Earned Title IV Aid (Federal Financial Aid)”, is determined by the percentage of days the student attended out of the total days within the semester. This percentage is then applied to the “Total Disbursable Title IV Aid (Federal Financial Aid)” for the semester which produced the amount of “Earned Title IV Aid (Federal Financial Aid)”.
The Disbursable Title IV Aid (Federal Financial Aid):
The total Title IV aid (Federal Financial aid) disbursed to the student ( or that could have been disbursed to the student), minus the calculated percentage of Title IV aid ( Federal Financial aid) earned by the student yields the amount of Title IV loan and grant aid that is unearned and that must be returned: (688.22(e)).