When a student receives Federal financial aid, including a Federal Pell Grant, a Federal Stafford Loans, a Federal PLUS Loan, or a Federal Supplemental Educational Opportunity Grant, they are agreeing to complete courses covered by the financial aid. If financial aid is accepted but then the student does not complete the term, part of the grant or loan may have to be repaid. If a student officially, or unofficially, withdraws from all classes, repayment of the aid will also be required. The process of returning aid due to one of the above circumstances is a federal law called the Return of Title IV Federal Financial Aid.
An official withdrawal is an instance in which the student drops or withdraws from all courses, either on-line or in person. An unofficial withdrawal is when the student stops attending courses or drops-out of school without officially notifying the institution. A student who receives all F grades or a combination of AW, F, U and W grades is also considered to have unofficially withdrawn from their courses.
How does one avoid paying back the Pell Grant? Keep attending classes.
- Once a student has completed more than 60% of the semester, the law then states the student earned all of their assistance and the Pell Grant will not have to be repaid.
- If, however, a student receives a Federal Pell Grant and then withdraws from, or stops attending, all classes before the completion of 60% of the semester, then the Pell Grant aid will have to be repaid.
What about Federal Student Loan(s)? Keep attending classes.
- Once a student has completed more than 60% of the semester, the law then states the student earned all of their assistance and the Loan Funds will not have to be repaid.
- If, however, a student receives a Federal Student Loan (Subsidized or Unsubsidized) and then withdraws from, or stops attending, all classes before the completion of 60% of the semester, then the Loan aid will have to be repaid.
What steps does the student take if they stop attending or withdraw from all classes? Read communications from CCD.
CCD will calculate the amount that must be repaid, based on how many days the student attended. The Financial Aid Office will send communications via the U.S. Mail and to the student's CCD e-mail account detailing the balance due. CCD must report to the federal government any student who has not repaid the funds within 45 days of such communications. Students will be ineligible to receive financial aid at ANY school until the funds are repaid in full.
How can funds be repaid? Directly to the CCD Cashier within 45 days.
Students are responsible for the entire repayment, which can be made to the Cashier's Office within 45 days. If the debt is not repaid within the appropriate timeframe, the amount owed will instead need to be repaid directly to the federal government. Students are encouraged to speak with the Cashier's Office before the end of the 45 day period to discuss any available payment arrangements.
What if the student never attended the courses at CCD? The student is considered a "No Show" and repayment is still necessary.
Students who never attended courses, but did not drop or withdraw from their courses, are considered "No Shows." These students are ineligible for financial aid, and 100% of the financial aid received must be repaid. In addition, if a student does not withdraw prior to the published drop date, they may also owe 100% of their tuition and fee charges (in addition to any repayment of financial aid received).
Where does the repayment go? Back to the aid programs in which the money came from.
Repayment funds are returned back to the Federal Financial Aid program in which it came from. Repayment of loan funds will also reduce the amount that must be repaid on Stafford or PLUS loans.
Federal regulations require CCD to return federal funds in the following order:
- Unsubsidized Federal Stafford Loan
- Subsidized Federal Stafford Loan
- Federal PLUS Loan
- Federal Pell Grant
- Federal Academic Competitiveness Grant - ACG
- Federal Supplemental Educational Opportunity Grant - FSEOG
How are the return of Title IV funds calculated? Through the use of a return formula.
The return of Title IV funds is determined by the following formula:
Total Award X Numbers of days completed / Total numbers of days in the semester
(Total award multiplied by days completed divided by the total days)
A student received a Pell Grant for $2,366 for full-time enrollment (12 credit hours). The student's tuition, fees and, book charges for the term totaled $1,390. The student then withdrew from all of their courses on the 38th day of the term. The length of the term totaled 105 days, so the student completed 38 of 105 calendar days.
|Percentage of Title IV Aid Earned
||38 / 105 total days
|Original Pell Grant Awarded
|Amount of Title IV Aid Earned
||$2,366 x 36.2% =
|Amount of Title IV Aid Unearned (to be returned)
||$2,366 - $856.49 =
|Institutional charges incurred by the student
|Percentage of unearned Title IV aid
||100% - 36.2% =
|Institutional unearned charges
||$1,390 x 63.8% =
|Amount of Pell Grant amount owed by CCD
|Amount student must repay to CCD
|Unearned aid - (minus) CCD unearned charges
||$1,509.51 - $886.82 =
|Title IV grant protection
||$2,366 x 50% =
|Additional amount student must repay Dept of Ed.
||$622.69 - $1183.00 =
||$0 (negatives = 0)