Return of Financial Aid
Return To Title IV Policy
Federal Regulation 34 CFR 668.22 specifies how a school must determine the amount of Title IV program assistance you earn if you withdraw from school. The Title IV programs offered by the university that are covered by this law are as follows: Federal Pell Grants, Iraq and Afghanistan Service Grants, Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Federal Supplemental Educational Opportunity Grants (FSEOG).
Though aid is posted to the account at the beginning of each term, students earn the funds as they complete the term. Students who withdraw from all classes during the period of enrollment may have only earned a portion of their Title IV Aid. The amount of aid earned is determined by a specific formula, and if a student received more assistance than earned, the excess funds must be returned by the school.
The amount of aid earned is determined on a proportional basis. For example, if a student completed 30% of the period of enrollment, they earned 30% of the assistance scheduled to be received. Once they have completed more than 60% of a period of enrollment, they will have earned all their financial aid.
Types of Withdrawals:
Official Withdrawals: The official withdrawal date is determined as the date that the “Withdrawal from All Classes” form is submitted to the Registrar’s Office.
Unofficial Withdrawals: If a recipient of Title IV aid unofficially withdraws from all classes without notifying MSOE, the Financial Aid Office is required to determine the student’s last date of academically related activity to calculate whether a portion of the student’s federal financial aid must be returned to the federal government. The Financial Aid Office will contact the student’s professor(s) to determine the last date a student completed any academically related activity. If the professor(s) is unable to provide a date, the Financial Aid Office will be required to use the midpoint of the term as the withdrawal date. The student will have 14 days after notification of any adjustment in aid to provide documentation that they completed the term or attended at a later date than the midpoint of the term.
Steps of Return to Title IV:
The “Return to Title IV” calculation involves several steps. Below is the pertinent information involved in the calculation:
- The school determines the Title IV financial aid that has been disbursed to the account versus the amount of Title IV financial aid that could have been disbursed to the account. In most cases, the full amount of aid will have disbursed. In the instance that aid has not been disbursed then the student may be eligible for a post-withdrawal disbursement.
- The school determines the amount of time attended versus the total days in the term. Breaks of five or more days during the term are removed from the total days. The calculation is represented as a percentage of aid the student has earned.
- The school multiplies the percentage of aid earned by the total amount of disbursed aid and aid that could have disbursed. This is the amount of aid the student has earned.
- The school takes the amount of aid the student has earned and subtracts it from the total aid disbursed for the student. This is the amount of aid the student has not earned.
- Any funds not earned will be returned no later than 45 days from the determination of a student’s withdrawal in the in the following order:
- Federal Unsubsidized Direct Loan
- Federal Subsidized Direct Loan
- Federal Direct PLUS Loan (parent or graduate)
- Federal Pell Grant
- Irag and Afghanistan Service Grant
- Federal Supplemental Educational Opportunity Grant
- If a student withdraws before completing 60% of the term, a bill will be mailed to the student for any balance due to the return of financial aid funds.
Post Withdrawal Disbursements:
A student who received less federal financial aid than they earned based on the calculation above may be eligible to receive a post- withdrawal disbursement. The MSOE Financial Aid Office will inform that student in writing that they are eligible for that disbursement prior to making any post-withdrawal disbursement. Any student who is contacted by the MSOE Financial Aid Office will have 14 days from the date of the letter to confirm that they would like to accept all or a portion of the funds available. Federal loans that were awarded and accepted by the student but not originated with the Department of Education are not eligible for a post-withdrawal disbursement.
Return of State Funds Policy:
If a recipient of state aid officially withdraws from all classes before completing 60% of the term, MSOE is required to calculate whether a portion of the student’s state financial aid must be returned to the state. The amount of state aid the student keeps is in direct proportion to the length of time the student remained enrolled during the term. The amount of state aid earned is determined by the refund policy for each state grant. Any aid not earned will be returned to the state.
Talent Incentive Program Grant:
Follows the Return of State Funds Policy stated previously
If a student withdraws from all classes within Weeks One to Four and has a credit balance after the federal aid calculations are completed, then the state funds (shown above) will be refunded based on the Return of Title IV Funds Policy stated above. If the student does not have a credit balance after federal aid calculations are completed, then there is no state refund up to a zero balance. If a student withdraws from all classes after Week Five, then the state funds (shown above) will not be refunded.
Hearing/Visually Handicapped Program/Indian Student Assistance Grant/Minority Undergraduate Retention Grant/Academic Excellence Scholarship:
If a student withdraws from all classes before completing 60% of the term and has a credit balance after federal calculations are completed, then the state funds (shown above) will be refunded based on the Return of Title IV Funds Policy stated above. If the student does not have a credit balance after federal calculations are completed, then there is no state refund up to a zero balance.
Return of Institutional Funds Policy:
If a recipient of MSOE scholarships or grants officially withdraws before 4:30 p.m. Friday of Week Four, MSOE will calculate the amount of institutional aid the student earned and return the unearned aid back to the university. The amount of aid earned is determined by dividing the number of days completed in the term by the total number of days in the term.
Students needing to withdraw from all of classes are encouraged to speak to a financial aid counselor before doing so to determine how it may affect financial aid.