Return to Title IV Facts
SECTION 13 RETURN OF TITLE IV FUNDS
- 13.1 Process Overview & Applicability
- 13.2 Withdrawal Date
- 13.3 Formula Calculation
- 13.4 Post-Withdrawal Disbursements
- 13.5 Returning Unearned Funds
- 13.6 Overpayment Resolution Section
- 13.7 Institutional Charges
13.1 PROCESS OVERVIEW & APPLICABILITY
Title IV funds are awarded to a student under the assumption that the student will attend a KCTCS college for the entire period for which the assistance is awarded. When a student withdraws, the student may no longer be eligible for the full amount of Title IV funds that the student was originally scheduled to receive.
Only students who have withdrawn from all classes are subject to the return of Title IV funds calculation.
If a recipient of Title IV grant or loan funds withdraws from a KCTCS college after beginning attendance, the amount of Title IV grant or loan assistance earned by the student must be determined.
Students earn their Title IV federal financial aid by attending class. If the student is not enrolled long enough to earn all of their aid, the “unearned” portion must be returned to the appropriate Title IV program.
Note: Federal Work-Study earnings are not affected by Title IV regulations concerning the return of unearned federal financial aid. Only grants and loans are affected by this regulation.
Beginning in the fall of 2017 the KCTCS System Office will begin processing all R2T4
calculations for the 16 colleges.
Each KCTCS college had a designated office on campus the student can visit to obtain more information on the withdrawal process.
- Students are directed to complete the Online Withdrawal form. This process determines
the official withdraw date for the student.
- The Central Processing Center (CPC) designated R2T4 staff perform all calculations for students.
- The CPC staff are responsible for ensuring the proper amounts are returned to the appropriate Title IV programs in a timely manner.
- The local business office at each college will track the repayment, and determine whether a repayment agreement will be offered.
- Acceptable methods of payment for repaying funds under an agreement with the institution (e.g. Cash, personal check, cashier’s check, credit card, debit card, money order).
- The CPC staff will offer the student any earned post-withdrawal disbursement, track when responses are due, and how responses (or lack thereof) are handled.
- The CPC staff will adhere to federal timelines when performing calculations, disbursing funds and returning funds to the DOE.
Situations that would not require college to perform a return of Title IV funds calculation include, but are not limited to a student who: was awarded Federal Work- Study only; dropped classes but did not completely withdraw; never began attendance in any classes; or for whom the institution cannot document at least one day of class attendance.
A list of financial aid programs to which the return of Title IV funds requirements apply include the following:
- Federal Pell Grants
- Federal SEOG
- Federal Direct Subsidized Loan
- Federal Direct Unsubsidized Loan
- Federal Parent PLUS loans
13.2 WITHDRAWAL DATE
The college must determine the student’s official date of withdrawal.
- For students where attendance is required, the last date of attendance is the date from the attendance record maintained by the institution.
- For all other students the official date of withdrawal is the date the student initiates the Online Withdrawal form.
- The CPC staff must complete the Return of Title IV calculation and notify a student of a grant overpayment within 30 days of date the institution student withdrew.
- Unearned Title IV funds must be returned as soon as possible, but no later than 45 days after the date the student withdrew.
For unofficial withdrawals a college must have a procedure for determining whether a Title IV recipient who began attendance during a period completed the period or should be treated as a withdrawal.
The Faculty Center is strongly recommended as the preferred mechanism to determine a student who has not officially withdrawn and fails to earn a passing grade in at least one course.
- KCTCS SO must complete the Return of Title IV calculation and notify a student of
a grant overpayment 30 days after the end of the earlier of:
- Payment or enrollment period.
- Academic year in which student withdrew.
- Educational program from which student withdrew.
- Unearned Title IV funds must be returned as soon as possible, but no later than 45 days after date school determined.
Academic related activity - When a student unofficially withdraws from a college that is not required to take attendance, the college may use either the student’s last date of attendance at an academically related activity or the midpoint of the period as the student’s withdrawal date.
Examples of academically related activities include:
- Examinations or quizzes
- Computer-assisted instruction,
- Academic advising or counseling,
- Academic conferences,
- Completing an academic assignment, paper, or project, and attending a study group required by the institution where attendance is taken
Faculty are required to maintain records associated with academic-related activity for auditing purposes.
KCTCS will utilize the midpoint date of the period as the withdrawal date. If the LDA reported by the faculty is a date later than the midpoint, then the LDA will be used as the withdrawal date for the student. If no LDA is reported by the faculty the midpoint date of the period will be utilized.
Leave Of Absence
KCTCS does not require leave of absence.
A college must make available upon request to prospective and enrolled students the following information.
- Requirements and procedures for officially withdrawing from the college.
- Tuition refund policy.
- Requirements for the treatment of Title IV funds when a student withdraws and the order of return of Title IV funds.
13.3 FORMULA CALCULATION
The formula calculation is determined as part of PeopleSoft functionality. Data is derived automatically from various panels within PeopleSoft. A student enrollment period, aid disbursed, and institutional charges is populated automatically through the customized process.
13.4 POST-WITHDRAWAL DISBURSEMENT
A post-withdrawal disbursement will occur with aid could have been disbursed.
- The SO will notify the student/parent via KCTCS message center of eligibility for a post-withdrawal disbursement related to loan funds. The student has 14 days to accept all or a portion of their loan funds.
13.5 RETURNING UNEARNED FUNDS
The student shares of unearned aid is determined automatically through the delivered PeopleSoft Return of Title IV process. Funds will be returned in the following order:
- Unsubsidized Direct Loans
- Subsidized Direct Loans
- Direct PLUS Loans
- Federal Pell Grants
- FSEOG Grants
- Iraq and Afghanistan Service Grant
The KCTCS SO will notify the student by mail if they owe a Title IV Grant overpayment, and will return any unearned funds within the federal guidelines as set forth in the Federal Student Handbook, Volume 5.
13.6 OVERPAYMENT RESOLUTION
KCTCS will return funds on behalf of a student who owes a Title IV grant overpayment and consider the returned funds as the student’s debt to the institution. The local college can determine whether the college will enter into a repayment agreement with the student.
Withdrawals may also affect future financial aid eligibility. Students may select one of the following options to pay outstanding balance:
- Pay entire balance
- Make payment arrangements
- Apply up to $200 from current term aid to prior term balance
13.7 INSTITUTIONAL CHARGES
KCTCS will include the following categories when calculating institutional charges with the return to title IV calculation.
- Mandatory Student Fee
- Barnes & Noble Charges
- Lab Fees
- Liability Insurance
- Security Fees (Bluegrass, Gateway, Jefferson)
- UK Mandatory Fees
- E-resources (Cengage Digital Content, Pearson, E-Book, etc.)
- Nurse Aid Testing Fee*
- Professional Licensure/Certification Testing Fee
The charges to be used in the R2T4 calculation are always the charges on the student’s account prior to complete withdrawal. Any changes made on a student’s account prior to the student’s complete withdrawal, and unrelated to the student’s complete withdrawal, should be reflected in the amount of institutional charges used for the R2t4 calculation. Therefore, if a student is initially charged tuition for 12 hours, drops a 3-hour class in the 100% Refund period, and then withdraws completely from the college at a later date, the tuition charge used in the calculation would be the charge for 9 hours. If, however, the student drops the 3-hour class on the same day s/he withdraws, the tuition charge used would be 12 hours.
*In the event the student is administratively withdrawn from the course and refunded the testing fee, the fee will be removed from the institutional charges used in the calculation (per Jan Brando, DOE).
No Show Policy
Colleges who do not remove charges for students reported as No Shows:
- Jefferson Community and Technical College
- Hazard Community and Technical College
- Henderson Community College*
- Owensboro Community and Technical College
*charges are removed if ALL courses are dropped on the same day
Institutional charges will not be adjusted for these colleges
According to federal financial aid regulations, when a recipient of Title IV grants or Direct Loans completely withdraws from an institution during the semester in which he/she began attendance, or is unsuccessful in all classes, the institution must determine the amount of Title IV grant and/or loan assistance the student has earned. In other words, if a student does not remain enrolled for the entire period of the term, he/she has not earned all of his/her Title IV aid. In that case, the institution must complete a Return to Title IV calculation and determine how much aid the student actually earned.
If a student completely withdraws from classes prior to aid being disbursed, the institution will determine how much aid “could have been disbursed” based on the withdrawal date, and credit that amount of Title IV funds to the institutional charges. Even after this amount is applied, the student may still owe the institution a portion of their institutional charges. If the amount of aid that could have been disbursed is greater than the student’s institutional charges, the student may receive a refund of Title IV funds via the Refund Policy.
If a student withdraws (officially or unofficially) after aid has been disbursed, all or a portion of the Title IV funds that were credited to the student’s account must then be returned to the Department of Education. The portion of funds that must be returned is based on the percentage of time the student remained enrolled. Once these funds are returned, the student MUST repay those funds back to the institution. Students have 45 days to repay the college the balance of the returned funds. If the student’s account goes unpaid after that time, the account will be referred to the Kentucky Department of Revenue for collection. Students who also have a Federal Grant Overpayment, in addition to the institutional liability, will be required to set up satisfactory payment arrangements or be turned over to the U.S. Department of Education for collection.
Students who find it necessary to withdraw from ACTC should follow the institutional withdrawal policy in the Office of Admissions and Records.
Per Federal Return to Title IV regulations, a student’s withdrawal date is:
- The date the student began the institution’s withdrawal process or officially notified the institution of intent to withdraw;
- The midpoint of the semester the student leaves without notifying the institution OR who receives all failing grades;
- The student’s last date of attendance of an academically related activity.
Title IV aid is earned in a prorated manner on a per diem basis up to the 60% point in the semester. Title IV aid is viewed as 100% earned after that point in time. If a return of funds is necessary, federal regulations state the institution must return unearned funds as follows:
- Unsubsidized Direct Loan
- Subsidized Direct Loan
- Federal Perkins Loan
- Direct Parent PLUS Loan
- Federal Pell Grant
- Federal SEOG
- TEACH Grant
- Iraq Afghanistan Service Grant
If you have any further questions about the Return to Title IV process, please contact the ACTC Office of Financial Aid.