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Return of Title IV Funds

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Students withdraw from their coursework for various reasons, sometimes for circumstances outside of their control. Other times, students withdraw from their coursework due to situations they might have avoided if they had known in advance the different ways withdrawing from courses impacts the aid they were receiving and their eligibility for federal aid in the future.

If you will not be completing the coursework you enrolled in after having begun your attendance, you are advised to read the following policy that dictates the Return of Title IV Aid (R2T4). You should also consider speaking with your financial aid advisor to discuss the effects of not completing your coursework. Students who have received Direct Loans or TEACH Grants need to complete Exit Counseling.
Direct Loan Exit Counseling
TEACH Exit Counseling

Official Withdrawal
Federal regulations require that aid eligibility be recalculated when a student withdraws or is dismissed prior to completing 60% of their enrolled coursework during a semester. Students wishing to officially withdraw must submit an official withdrawal form to the Records Office.

Unofficial Withdrawal
If a student fails to earn any credit from their classes in a semester and the documented evidence of participation doesn’t extend past the 60% point of their enrollment, the student’s aid eligibility is also recalculated. Students who stop attending their courses and don’t notify the Records Office can typically be identified as having unofficially withdrawn from their courses through the grades submitted at the end of the term. If you are not going to complete your coursework, you should officially withdraw.

Return of Title IV Aid (R2T4) Process
Upon determination that a student has withdrawn, Financial Services will calculate an R2T4. The following steps are used to calculate the amount of aid a student has earned and how much must be returned (if any).

  1. Determination of the withdrawal date.
  2. Determination of the amount of aid the student earned.
  3. Determination of the amount of aid the student did not earn.
  4. Determination of the amount of aid the University must return to the federal government.
  5. Determination of the amount of aid the student must return to the federal government.

1. Withdrawal Date
For Title IV purposes, the withdrawal date is either: the date the official withdrawal process begins, the date the student otherwise gives official notice of intent to withdraw to the Records Office (e.g., letter, withdrawal form, in-person), the mid-point of the term, or the last documented date of attendance in an academically-related activity (e.g., documented attendance in a class or lab or submission of an assignment in an on-line course).
2. Earned Aid
The percentage of aid a student earns is equal to the percentage of the semester (payment period) the student has completed as of the withdrawal date. The percentage of the payment period completed is calculated by dividing the total number of calendar days completed by the total number of calendar days a student was scheduled to attend in the term. The percentage of Title IV assistance the student earns is equal to this completed percentage up to 60%. If the withdrawal occurs after the 60% point, a student is considered to have earned 100% of their aid. The amount of aid the student has earned is calculated by multiplying this percentage by the total amount of Title IV aid disbursed (and could have been disbursed) to the student.
3. Unearned Aid
The amount of Title IV aid to be returned is based on the percentage of unearned aid. That percentage is calculated by subtracting the earned aid percentage from 100%. If a student did not receive all of the funds that they earned, they may be due a post-withdrawal disbursement. If the calculation determines that a student is due a post-withdrawal disbursement, the school must obtain the student’s permission to disburse any loan funds. Furthermore, the school may keep all or a portion of grant funds to pay for any tuition, fees and room and board charges that are due.
4. Amount of Title IV Aid to Return
The institution is required to return the lesser of the unearned aid percentage applied to institutional charges or the unearned aid percentage applied to the total Title IV aid received within 45 days of the date of determination of a withdrawal. Unearned aid will be returned to the aid programs in the following order: Unsubsidized Direct Loans, Subsidized Direct Loans, Graduate PLUS Loans, Parent PLUS Loans, Pell Grant, FSEOG, TEACH Grant. The University will bill the student for any account balance created when Title IV aid is returned.
5. Title IV Aid to be Returned by Student
A student is required to pay the difference between the amount of unearned aid and the amount returned by the University. If a student’s portion of the unearned aid includes federal grants, they are only required to return the grant amount that exceeds 50% of the original amount received for that semester. If the amount the student owes is less than $50, then no payment is required. Federal regulations allow schools to charge a student for any amount paid on the student’s behalf. MBU’s policy is to return funds on the student’s behalf and bill the student accordingly. The student’s share of loan funds to be returned may be repaid in accordance with the terms of the master promissory note.

Post-withdrawal Disbursement
If a student’s earned aid had not fully been disbursed at the time of their withdrawal, the student may be eligible for a post-withdrawal disbursement. If the post-withdrawal disbursement includes loan funds, the school is required to get the student’s permission before these can be disbursed. The student may decide to decline some or all of the loan funds so additional debt is not incurred. The school may use all or a portion of the post-withdrawal disbursement of grant funds for tuition, fees, and room and board charges. The school is required to get the student’s permission for any post-withdrawal grant disbursement for all other school charges. If the student does not give permission, the student will be offered the grant funds. Please note, there are some Title IV funds that may be scheduled to be disbursed but cannot be disbursed to the student following a withdrawal due to other eligibility requirements.

Considerations for Students Enrolled in Modules (ex. 8 Week Courses)
The R2T4 process does not take into consideration the amount of coursework completed throughout a term. Therefore, if after a student has earned credit for courses in a shortened-length course (module) and then subsequently withdraws from their remaining courses, an R2T4 calculation must be made.

A student who withdraws from their first modular courses, but intends on staying enrolled in subsequent modular courses must provide active confirmation of their future enrollment to stop Financial Services from calculating an R2T4. This can be done by adding additional courses at the time of withdrawal from the first module, or by submitting a notice in writing to Financial Services indicating your intent to continue your enrollment. If a student subsequently fails to begin attendance after having confirmed their intent on returning in a later part of the semester, an R2T4 calculation will resume.

Other Factors to Consider
While federal regulations pertaining to the Return of Title IV Funds are important to consider when withdrawing from coursework, there are other federal regulations and even institutional policies for students to consider.

  • University Refund Schedules: Depending on when you withdraw from your courses, a portion of tuition and fees is refunded to your account.
  • Scholarship Proration: Scholarships pay for a percentage of tuition, so when tuition and fees are reduced, institutional scholarship aid is prorated to pay toward the same percentage of tuition.
  • Satisfactory Academic Progress (SAP): Future eligibility to receive federal aid depends on students maintaining satisfactory academic progress. Withdrawing and/or failing courses leads to a drop in the percentage of courses you complete. Completion rates lower than 66.67% lead to the suspension of a student’s eligibility. More information on Satisfactory Academic Progress can be found here.
  • Unusual Enrollment History: Federal aid records identify students who display patterns of enrollment that could be evidential of students enrolling in an institution long enough to only get a federal aid refund before subsequently withdrawing.