Return of Title IV Funds and Refund Process

Title IV of the Higher Education Act of 1965, as amended in 1998, (Title IV, and HEA program) establishes general rules that apply to federal student financial assistance programs.

For purposes of Return of Title IV Funds, these programs include:

• Pell and Federal Supplemental Educational Opportunity (FSEOG) Grants
• Direct Loans
• Direct PLUS Loans

What Do Students Need to Know About the Return of Title IV Funds?

• Any student who does not complete an academic semester for which financial aid is received, or could have been received, will be reviewed for a Return of Title IV Funds calculation. This includes students who drop, officially or unofficially withdraw, are dismissed or take a leave of absence during a semester.
• The Return of Title IV Funds (R2T4) is based on the premise that students “earn” financial aid for each calendar day that they attend classes. For example, if a student attends 32 days of a semester that is 80 calendar days in length, the student will have “earned” 40 percent of his or her aid.
• Students who complete more than 60 percent of the semester are considered to have earned 100 of their financial aid.
• Students who successfully complete (D- grade or better) a module or combination of modules within a term that equal 49% or more of the term are exempt from the R2T4 requirement.  Likewise, students who successfully complete (D- grade or better) a minimum of 6 (part time) credit hours during a pay period are exempt from the R2T4 calculation requirement.
• The Return of Title IV Funds policy is separate from the college’s refund policy. A student who withdraws from the semester may be required to return unearned Title IV financial aid funds and may still owe Westmoreland County Community College for institutional charges. Please refer to your student handbook for the refund policy.
• Return of Title IV Funds does not apply to federal work-study, scholarships, state grants such as the Pennsylvania State Grant or institutional awards. Please contact the Financial Aid office for more information on the consequences of dropping classes if you receive these types of financial aid.
• Students who drop one or more of their classes may fail to maintain Satisfactory Academic Progress, which may result in ineligibility for financial aid in the future. Please contact the Financial Aid office and inquire before dropping a course.

• The calculation of earned Title IV funds includes the following Title IV grant ad loan funds if they were disbursed or could have been disbursed to a student for the payment period or period of enrollment for which the calculation is being performed.

  • Pell Grant
  • Iraq and Afghanistan Service Grant
  • TEACH Grant
  • FSEOG
  • Direct Loan (Subsidized, Unsubsidized, and PLUS loans)

Return of the Title IV Funda (earned versus Unearned)

Any aid received in excess of the earned amount is considered unearned. Westmoreland County Community College must always return any unearned Title IV funds it is responsible for returning within 45 days of the date the school determined date the student withdrew, and offer any post-withdrawal disbursement within 30 days of the date Westmoreland determined the student withdrew. The calculation is based upon only the amount of Title IV Aid for which you were eligible.

Calculating Earned Financial Aid

The amount of earned financial aid is calculated on the daily basis from the first day of classes. The process uses calendar rather than business days. Earned aid is determined by taking the number of days attended before enrollment divided by the total number of days in the term (first day of instruction until the last day of finals, excluding breaks of 5 days or more).

Return policies apply to the students that withdraw on or before the 60% point of the term. For a student who withdraws after the 60% point-in-time, there is no unearned financial aid.

Late or Post-Withdrawal Disbursement

Students may be eligible for a late or post-withdrawal disbursement if they have accepted aid that did not disburse at the time of the withdrawal date. Aid that could have been disbursed but had not yet paid is included in the R2T4 calculation.  If eligible, any post-withdrawal disbursement of grant funds will be applied to the student’s account, and the student will be notified of the disbursement.  The Financial Aid office will send notification of the action required to either accept or decline a portion, or all, of the post-withdrawal disbursement for any loan funds the student had accepted prior to the withdrawal date.  Loan funds that were not accepted prior to the withdrawal date cannot be added to the account.  If no response to the post-withdrawal loan disbursement notice is received within approximately two weeks of notification, the award will be canceled.  Students will not be able to accept any post-withdrawal disbursement of loan after the award is canceled.

If items still need to be completed, such as verification, student loan entrance counseling, master promissory notes, or resolution of conflict information from the FAFSA, the student will be notified what items they will need to complete to receive a late or post-withdrawal disbursement and given a deadline to complete the items. Failure to complete any item necessary for the school to disburse the aid by the deadline will result in the award being canceled.

Unofficial Withdrawal

Westmoreland County Community College is a non-attendance taking institution and uses the last date of an academically related activity as the withdrawal date used for the Return of Title IV processing. An unofficial withdrawal at Westmoreland can be defined using two common categories. The first category is when the student ceases attending all classes and fails to begin the withdrawal process or otherwise notify the Registrar of his/her intent to withdraw due to illness, accident, significant personal loss, or other circumstances beyond the student’s control. The second category of unofficial withdrawals is when the student receives a combination of all failing grades, withdrawals, and incompletes or ‘N’ grades. The Financial Aid office uses the last date of academically related activity, as reported by the faculty member, on the final grade roster.

Section 34 CFR 668.22(j)(2) requires a college to have a mechanism in place to identify students who began attendance and received or could have received an initial disbursement of Title IV funds. The Financial Aid office validates enrollment prior to disbursement using a certification process by the Registrar’s Office of receiving roster reports at the required Census date. The Census date, as determined by the state, is defined as the 20% date for the start and end calendar of each payment period. The school must make determination as soon as possible, but no later than 30 days of the earlier: the payment period, the academic year, or the program.

Calculating Return of Title IV Aid Amount

Once the earned and unearned aid percentages are determined, the next step is to calculate the dollar amount of unearned aid that must be returned. The Return amount is determined by multiplying the unearned aid percentage by the total of all Title IV aid received.

Unearned Aid Percentage X Total of all Title IV Funds Received = Total Unearned Aid

School Portion of the Return

The amount of unearned aid that must be returned by Westmoreland County Community College is a percentage of the institutional charges (tuition & fees, books & supplies) for the term. Once the dollar amount of the school portion of the Return is determined, it is compared to the total amount of all unearned aid. If the school portion is less than the total unearned aid, then Westmoreland must return the amount of the school portion. If the calculated school portion exceeds the total unearned aid, then Westmoreland must return the amount of the total unearned aid.

Financial aid will be returned to the aid program from which it came from. If returned to loan program, your outstanding balance for the loan will be reduced by the amount of the return. Aid will be returned in the following order:

• Unsubsidized Direct Loan
• Subsidized Direct Loan
• Direct PLUS Loan
• Federal Pell Grants
• Iraq and Afghanistan Service Grant
• Federal Supplemental Educational Opportunity Grant
• TEACH Grants

Tuition and Fee Refund Versus School Return Amount

In most cases, the amount of the tuition and fee refund received will be less than the amount of the school return portion of Title IV funds. When you discontinue enrollment, a balance will be created on your student account for the difference between the fee refund and the financial aid return amount. You will be responsible for paying this balance in addition to any other balance created from the student portion for the return.

Student Portion of Retrun of Title IV Funds

After the school returns the correct amount of aid, any amount of the total unearned aid that remains becomes the student portion of the return. The student portion of the return is calculated by subtracting the amount of the school Return from the total unearned aid.

Total Unearned Aid (Subtract) School Return Amount = Student

Portion of Return

Depending on the remaining sources of aid after the school Return, the student portion of the return is distributed back to the aid program from which it was awarded as follows:

• Any amount of the return allocated to loans is repayable after you leave Westmoreland and enter repayment according to the terms and conditions of those loans. You will not be billed for these funds upon discontinued enrollment.
• Any amount allocated to federal Title IV grants are subsequently decreased by 50%. This adjustment is an effort to reduce the impact of discounted enrollment on those students receiving grant funds. Westmoreland will return these funds on your behalf and you will be responsible for reimbursing the college for this return.

Repayment Process for Referred Pell Grant Payments

What is an Overpayment?

Federal regulations for Title IV funds require that students must attend their classes in order to maintain eligibility for financial aid.  All colleges are required to perform “return of funds” calculations for each student who receives federal financial aid who withdraws or stops attending all of their courses during unless the student successfully completes (D- grade or better) at least halftime credits module(s) equaling at least 49% of the semester. In most cases, this means that Westmoreland County Community College must refund a portion of charges for the semester and the student must repay a portion of the funds received for the semester. Students are encouraged to discuss the consequences of dropping out of school with the Financial Aid office before they stop attending.

As the name indicates, grants do not usually have to be repaid. However, there are three reasons why you may have to repay part of a federal grant:

• You did not attend all of your courses for which the grant was paid. The portion of Pell Grant you can receive each term is partially based on the number of credits you are taking.  Pell Grant is awarded based on your enrolled credits for the term, but if you do not attend the courses for which Pell Grant was awarded, your grant will need to be recalculated based on the number of credits you attended.
• The amount given to you was more than you were eligible to receive (this is called an over-award). This can happen if the school makes an error when calculating your eligibility for financial aid, or if an audit of your financial aid records reveals that some of the information you provided was incorrect (for example, your income was higher than you reported on your application for financial aid).
• You withdrew early from the program for which the grant was given to you, and a Return to Title IV (R2T4) calculation must be applied.

If you received a refund/stipend from the Pell Grant, and it is determined that you owe a portion of those funds back to the Department of Education, then you will be responsible for repaying the overpayment.  Once Westmoreland has referred a Pell Grant overpayment to the Department of Education for collection, the student must repay the overpayment directly to the department. It is not possible for Westmoreland to accept payment after the matter has been referred. The process below explains the steps to resolve the indebtedness and regain eligibility for the Title IV financial assistance.

Please note that this process may take 3 – 6 weeks to resolve.

The Financial Aid Office will provide you with a copy of the Overpayment Referral so that proper crediting to your account will occur. You may arrange to repay the referred amount to the U.S. Department of Education; however, the entire over-payment amount must be repaid in full before the Westmoreland Financial Aid Office will restore your Title IV eligibility. Arrangements must be made directly with the department. You may contact the department by phone at 1-800-621-3115.

When making a payment, mail a check or money order along with a copy of the referral and a letter with your current address to:

Sample of Return to Title IV Calculation

• 2019-2020 – Student enrolled in Fall Semester and withdrew on October 4, 2019.
• 8/15/2019 - 12/11/2019 (total 119 days - minus 5 days for Thanksgiving Break = 114):
• Totally withdraw from all classes on 10/4/2019 
  • Number of days attended: 51
  • Number of days in the semester: 114
  • Earned financial aid: 44.73%
  • Unearned financial aid: 55.27%