Return of Title IV Funds Policy
WILL DROPPING A CLASS/CLASSES AFFECT MY FINANCIAL AID?
Dropping classes can affect your eligibility to receive current and future financial aid. It is important to know and follow the appropriate processes and procedures for withdraw. It is recommended that you consult with a Financial Aid Counselor prior to dropping classes to ensure you will not owe funds back, and discuss how your future eligibility is affected.
OCTC RETURN OF TITLE IV AID POLICY
Federal regulations require Owensboro Community & Technical College (OCTC) to recalculate a student’s eligibility for federal financial aid funds the student has earned when the student completely withdraws or fails to earn a passing grade in all classes from an institution, during the semester in which they began attendance.
OCTC must determine the amount of Title IV grant and/or loan assistance the student has earned. Students whose attendance is documented past this date (60% mark) will not be subject to the Return to Title IV policy. At the time a student is unsuccessful in all classes (receives grades of E, F, or W) or withdraws from all classes, the Financial Aid Office will calculate the percentage of aid that must be returned.
OCTC is a non-attendance taking institution. In accordance with federal guidelines, the Last Date of Attendance (LDA) for official withdraw is the date the student showed intent to withdraw. For unofficial withdraw, the LDA is determined by the last documented academic related activity. Additionally, if a student attends beyond the 60% they have earned all aid for return purposes.
See an example below.
Example: A freshman withdraws 11 days into the semester. They were charged full-time in-state undergraduate tuition and institutional charges of $1,000 for the semester. The student received a PELL grant of $1400 and FSEOG of $1200 for a total of 2600 of Title IV aid disbursed.
The payment period began January 8th and ended May 4th. There are 110 days in the semester and they attended 11 days.
- Percentage of earned aid = 11 days/110 days = .100 = 10% earned
- Since the percentage earned is less than 60%, the percentage of Title IV aid earned = 10%
- Multiply the % of Title IV aid earned (10%) by the total Title IV aid disbursed and could have been disbursed ($2600)
- $2600 x .100 = $260.00 = amount of Title IV aid earned
- Because the total aid disbursed, ($2600) is greater than the total aid earned ($260), Title IV aid will need to be returned.
- $2600 - $260 = $2340. Title IV aid to be returned = $2340
- The amount of unearned Title IV aid due from the school is calculated
- Institutional charges for the payment period = $1000 tuition and fees
- Subtract the percentage of Title IV aid earned (10%) from 100% = 90%
- Calculate the unearned institution charges. Institution charges ($1000) x percentage of Title IV aid unearned (90%) = $900
- Compare the amount of Title IV aid to be returned ($2340) to the unearned institutional charges ($900) the lesser amount ($900) is the amount of Title IV aid due from the school.
The unearned financial aid must be returned to the respective federal programs no later than 45 days from when the student separated from the college. The returned unearned aid will likely create a bill. If so, please contact Business Services for payment options.
If you need to drop a course or withdraw completely from the college, you will need to complete the process through your PeopleSoft Student Self-Service Account. If you are withdrawing from your coursework after midterm, instructor permission is required. Please reference the Academic Calendar for specific dates.
Students will be held responsible for financial delinquencies, which result from failure to complete the withdrawal process. Please refer to the college’s Return of Title IV Policy below to review the potential financial impact.
DETERMINING DATE OF WITHDRAW
Official and unofficial withdrawal dates will be determined using the federal regulation definition for a withdrawal date. The official date will be determined by the following:
- Date the student begins the withdrawal process;
- Date the student provides official notification of intent to withdraw;
- Students who fail to officially withdraw are assumed to have completed at least 50% of the term unless an earlier or later date is determined by the school.
If the students post-withdrawal disbursement includes loan funds, OCTC must get the students permission in writing before the funds can be disbursed. The student may choose to decline some or all of the loan funds so they do not incur additional debt. It is clearly in the student’s best interest to borrow as little as possible. If the student does not give permission for the school to disburse enough loan funds to cover their institutional charges, the student will be responsible for paying the balance due on their account. OCTC is allowed to automatically use all or a portion of the student’s post-withdrawal disbursement of grant funds for tuition and fees.
An official withdrawal is the federal term used when a student begins the official withdrawal process or provides official notification to the school of his/her intent to withdraw. The date of determination used for R2T4 purposes would be the date the student began either the official withdrawal process or the date of the student’s official notification.
A student is considered to be an unofficial withdrawal in the event they received all failing grades (E or F) at the end of the term. OCTC instructors are required to report a last date of attendance at the time of grading. The date reported is used to calculate the determination date. OCTC will calculate the percentage of financial aid earned based off the Department of Education standard of 50% unless a more recent date of attendance is confirmed by instructor report. In that event, the failing grade is considered earned, and will not be treated as an unofficial withdrawal.
An inadvertent overpayment occurs when the school disburses funds to a student who is no longer in attendance, but prior to the date the school determines the student withdrew from the program. This would include any federal financial aid fund disbursements made after the student’s last date of attendance but prior to the College’s determination that the student was withdrawn.
If the student owes the U.S. Department of Education any Pell grant or SEOG funds as a result of an R2T4 overpayment, the student is reported to National Student Loan Database System by the Financial Aid Office. All overpayments must be handled between the student and the U.S. Department of Education. The student is mailed a letter within 30 days of the date that the school determined the student withdrew informing them about the over payment status and providing instruction on how to make the payment arrangements.
FUNDS WILL BE RETURNED IN THE FOLLOWING ORDER:
- Unsubsidized Direct Stafford Loan
- Subsidized Direct Stafford Loan
- Direct Plus Loan
- PELL Grant
- Federal Supplemental Educational Opportunity Grant (FSEOG)
If a student receives less federal student aid than the amount earned, the school must offer a disbursement of the earned aid that was not received. This is called a post-withdrawal disbursement.
The college will notify the student by mail of eligibility for a post-withdrawal disbursement and they have 14 days to accept or reject any balance.
If you have questions please contact the OCTC Financial Aid Office at 855-5GO-OCTC, or through the Go KCTCS! Student Services Center.