Financial Aid and Billing - University of Mount Olive (original) (raw)

The law specifies how an institution must determine the amount of Title IV program assistance that a student earns if they withdraw from school. The Title IV programs that are covered by this law are: Federal Pell Grants, Iraq and Afghanistan Service Grants, TEACH Grants, Direct Loans, Direct PLUS Loans, Federal Supplemental Educational Opportunity Grants (FSEOGs), and Federal Perkins Loans.

Though a student’s aid is posted to their account as soon as all FA requirements are completed, a student earns the funds as they complete the period. If a student withdraws during their payment period or period of enrollment, the amount of Title IV program assistance that a student has earned up to that point is determined by a specific formula. If a student, their parent or the institution received (on the student’s behalf) less assistance than the amount the student earned, they may be able to receive those additional funds. If the student received more assistance than they earned, the excess funds must be returned by the institution and/or the student.

The amount of assistance the student has earned is determined on a pro rata basis. For example, if the student completed 30% of their payment period or period of enrollment, they earned 30% of the assistance they were originally scheduled to receive. Once a student has completed more than 60% of the payment period or period of enrollment, they have earned all the assistance that they were scheduled to receive for that period.

If a student did not receive all of the funds that they earned, the student may be due a post-withdrawal disbursement. If the student’s post-withdrawal disbursement includes loan funds, the institution must get the student’s permission before the funds can be released to the institution. A student may choose to decline some or all of the loan funds so that they do not incur additional debt. The institution may automatically use all or a portion of the student’s post-withdrawal disbursement of grant funds for tuition, fees, and room and board charges. The institution will need the student’s permission to use the post-withdrawal grant disbursement for all other school charges. If the student does not give permission, they will be offered the funds. However, it may be in the student’s best interest to allow the school to keep the funds to reduce their debt at the school.

There are some Title IV funds that a student may be scheduled to receive that cannot be disbursed to them once they withdraw because of other eligibility requirements. For example, if a student is a first-time, first-year undergraduate student and has not completed the first 30 days of their program before they withdraw, the student will not receive any Direct Loan funds that they would have received had they remained enrolled past the 30th day. If the student, their parent or the institution received (on the student’s behalf) excess Title IV program funds that must be returned, the institution must return a portion of the excess equal to the lesser of:

1. The student’s institutional charges multiplied by the unearned percentage of their funds, or
2. The entire amount of excess funds.

The institution must return this amount even if it didn’t keep this amount of your Title IV program funds. This could create a balance owed to the institution by the student.

If the institution is not required to return all of the excess funds, the student must return the remaining amount.

Any loan funds that the student must return, the student (or their parent for a Direct PLUS Loan) repay in accordance with the terms of the promissory note. That is, the student will make scheduled payments to the holder of the loan over a period of time.

Any amount of unearned grant funds the student must return is called an overpayment. The maximum amount of a grant overpayment that a student must repay is half of the grant funds they received or was scheduled to receive. A student does not have to repay a grant overpayment if the original amount of the overpayment is $50 or less. The student must make arrangements with the institution or the Department of Education to return the unearned grant funds. Students who owe a balance as a result of an overpayment are not eligible for any additional Title IV aid until the balance has been satisfied.

A student’s official withdrawal date is used as the last date of attendance and to calculate earned percentage of Federal Aid. A student’s official withdrawal date is determined by using the last date of attendance that is documented and submitted to the Office of the Registrar.

The requirements for Title IV program funds when a student withdraws are separate from any refund policy the institution may have. Therefore, a student may still owe funds to the institution to cover unpaid institutional charges. The University may also charge the student for any Title IV program funds that the school was required to return.