The Return of Title IV funds procedure shall apply to all students who withdraw, drop out or are expelled from A-B Tech and receive financial aid from Title IV funds. “Title IV Funds” refers to the Federal financial aid programs authorized under the Higher Education Act of 1965 (as amended).
Title IV Funds are awarded to a student under the assumption that the student will attend school for the entire period for which the assistance is awarded. If a student is withdrawn from, ceases attendance in, or fails to complete all courses during the enrollment term, A-B Tech is required to determine how much of the original award has been “earned” by the student. This determination is referred to as a “Return of Funds” calculation. In many cases, the student will be required to repay any “unearned” financial aid as a result of this calculation.
If a student is withdrawn from, ceases attendance in, or fails to complete all courses during the enrollment term before completing more than 60%, A-B Tech is required to recalculate the student’s award based on the percentage of the term completed. Both A-B Tech and the student may be responsible for returning a percentage of the unearned aid.
On the other hand, if a student ceases enrollment after attending through 60% of the term, then the student has earned his/her Title IV award(s) for that period.
A-B Tech does not require faculty to take attendance. The Financial Aid Office will attempt to verify the last date of attendance for students who withdraw from or fail all courses. If it is not possible to determine a last date of attendance, the return will be calculated at 50%.
Performing the Return of Title IV Funds Calculation
The percentage of Title IV aid earned by the student is calculated using the student’s withdrawal date. Using the withdrawal date, A-B Tech can determine how many days in the enrollment term the student actually completed for credit hour programs. This is divided by the total number of days in the term, which results in the percentage of the term completed by the student. This same percentage is the percentage of Title IV aid earned by the student:
Number of days completed by student / Total days in the term
--Note: the total number of days in the term does not include scheduled breaks of more than 5 days
If the percentage of earned Title IV aid calculated is less than or equal to 60%, A-B Tech will be required to return to the Department of Education the remaining, unearned Title IV aid. The amount to be returned is the lesser of:
1. the total amount of unearned Title IV aid; or
2. the percentage of unearned Title IV aid multiplied by all institutional charges incurred by the student
for the payment period or period of enrollment.
Once a student’s award is re-calculated, the new award amount may no longer be sufficient to pay all unpaid charges due to A-B Tech. Any unpaid charges must be repaid by the student, in addition to the unearned financial aid due back to A-B Tech. As with any unpaid balance, students are not permitted to register for additional courses or obtain an official academic transcript until the balance is paid-in-full.
Any unearned Title IV aid resulting from this calculation will be returned by A-B Tech to the federal government.
In some cases, students will not have received all of the Title IV aid earned. In such cases, the student may be due to a Post-Withdrawal Disbursement. This disbursement is comprised of any federal or state-funded grant programs in which A-B Tech participates. A-B Tech will apply this Post-Withdrawal Disbursement automatically to any unpaid tuition, fees, and other institutional charges.
Any amount of unearned grant funds that a student must return is called an overpayment. The maximum amount of a grant overpayment that must be repaid is half of the grant funds a student 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. If a student has a grant overpayment, he/she will be notified in writing by the Financial Aid Office. The student must make arrangements with A-B Tech or the Department of Education to return the unearned grant funds.
Return of Funds Calculation—Example
A-B Tech’s Return of Title IV Funds policy is illustrated by the following example of a student who withdraws from classes in a credit hour program:
An A-B Tech student is attending full-time for the Fall semester (the Fall semester is 115 days in length). All of the student’s classes are scheduled during the entire 16-week semester. When the student withdraws from classes, it is determined that the student ceased attendance on the 30th day of the semester.
Student’s Financial Aid and Charges:
Federal Pell Grant: $2,908.00 (Total Financial Aid)
Tuition and Fees: ($972.00)
Excess Financial Aid Refunded to Student: $1,463.00
A-B Tech is required to determine the amount of financial aid earned by the student, based on the percentage of total days attended for the Fall semester. A-B Tech will then need to determine how much aid to return. The amount to be returned is either a) the total amount of unearned Title IV aid, or b)the percentage of unearned Title IV aid multiplied by all institutional charges incurred by the student, whichever is less.
Percentage of Financial Aid Earned:
Completed Days: 30 days
÷ Total Days in Payment Period ÷ 115 days
= Percentage of Award Earned = 26.1%
Amount of Federal Financial Aid Earned:
Percentage of Award Earned: 26.1%
x Total Aid Awarded: x $2,908.00
= Earned award based on attendance: $758.99
Amount of Financial Aid to be returned:
Total Aid Awarded: $2,908.00
- Earned award based on attendance: -$758.99
= Financial Aid to be Returned: $2,149.01
College returns: $1,067.86
To determine the amount A-B Tech must return, compare the following amounts: (1) The total amount of unearned aid is $2,149.01. (2) The institutional charges of $1,445, multiplied by the unearned percentage of 73.9%, is $1,067.86. The College must return the lesser of these two, which is $1,067.86. A-B Tech returns the entire amount to be returned to the Department of Education. In turn, the student is responsible for re-paying the same amount to A-B Tech.
A student who requires a Return of Funds calculation will be mailed an invoice for the balance due by the Business Office.
Return of Funds for State Grant Awards
The North Carolina State Education Assistance Authority (NCSEAU) requires A-B Tech to complete a “Return of Funds” calculation if a student withdraws from or ceases attendance in all courses for the semester. A-B Tech uses the Return of Funds Calculator on the CFNC State Grants Portal to perform this calculation. Funds must be returned if the student withdraws or ceases attendance on or before the 35% point of the term. Like calculations for federal financial aid awards, the last date of attendance is used (if known) to determine the amount of state aid earned by the student. Of state initiatives available in North Carolina, A-B Tech participates in and offers aid to students from the North Carolina Community College Grant (NCCCG) and North Carolina Education Lottery Scholarship (NCELS).