Is there a financial aid penalty for withdrawing from one or more of my classes?

It is strongly recommended that before withdrawing from classes, students who receive any type of Title IV financial aid funds talk with Financial Aid staff to determine if they will incur a financial liability if they withdraw from classes.

Students earn a portion of the Title IV financial aid they receive for each day they are in school, until more than 60 percent of the term is completed; at that point the federal government considers 100 percent of the aid to be earned. Students who withdraw from all classes before completing 60.5 percent of the term in which they are enrolled may be required to repay all or part of the Title IV financial aid they received. Students who fail to complete all classes within a term where Title IV federal student aid was received may also be required to repay all or part of the Title IV financial aid they received. Under the Federal Title IV Return of Funds Policy, the amount of aid received will be multiplied by the percentage of the term completed to determine the total aid earned. The total aid earned will be subtracted from the total aid awarded, resulting in the amount of unearned aid. The cost of tuition and fees must be returned to Title IV programs, and the student in turn incurs a financial obligation to the College. The student must repay the College within 45 days of the day the school notifies him or her of the overpayment. After 45 days, the account will be turned over to the U.S. Department of Education, and the student will be required to make satisfactory payment arrangements with the U.S. government. The federal government does not allow a student to appeal a Title IV Repayment.

If a student owes the College funds due to a Title IV Repayment, he or she may be ineligible to re-enroll. Students who owe a Title IV Repayment may also be ineligible for additional Title IV federal financial aid from any college.

Example: A student is awarded the following aid:
$ 2,865 Federal Pell Grant
$ 125 FSEOG
$ 1,168 Federal Direct Loan
$ 4,158 total Title IV aid received

If the student withdraws after completing 20 percent of the term, only 20 percent of the toal award has been earned. Eighty percent of the total award is unearned and must be repaid and returned to the federal programs ($4,158 x 80% = $3,326.40 unearned aid). For example, if the student's tuition and fees were $600, then 80 percent of that must be returned to the Title IV programs. Eighty percent of $600 is $480, which will be returned to the Federal Direct Loan program by TCC, leaving a balance on this loan of $833, which the student will repay as part of the normal loan repayment schedule.

$2,350.40 unearned aid
-480.00 returned to Federal Direct Loan program
-833.00 Federal Direct Loan balance to be repaid
$1,037.40 balance of unearned aid
$ 518.70 returned to Federal Pell Grant Program

(Grant programs require that only 50% percent of the funds be returned.)

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Details

Article ID: 21230
Created
Wed 12/7/16 3:12 PM
Modified
Wed 10/4/17 11:24 AM