Return of Title IV Funds and Refund Process | Westmoreland County Community College, Youngwood, Pennsylvania

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 at least one course within 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 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.
  • 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.

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 the first sixty (60) percent 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 two reasons why you may have to repay part of a federal grant:

  • 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.

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:
    • U.S. Department of Education National Payment Center
    • P.O. Box 4169
    • Greenville, Texas 75403-4169
    • Phone #1-800-621-3115
  • Allow approximately 14 days for processing of the payment and then call the Debt Collection Service (DCS) and request a “Reinstatement of the Title IV Eligibility” letter. (If they have not yet processed payment, keep calling until they acknowledge receipt.) The letters should be mailed to you in approximately 14 days. Bring the letters to the Financial Aid office for verification purposes. The DCS will not mail the letters to Westmoreland FAO directly.
  • If you opt for a payment arrangement, you must make consistent payments in accordance with the agreement. One must reapply for federal financial aid every year. You must complete a Free Application for Federal Student Aid (FAFSA) for the academic award year you plan to attend before your eligibility can be determined. You may complete the application while you are waiting for resolution of the overpayment.

Return of the Title IV Funds (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 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).

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. If eligible, the Financial Aid office will send notification of the action required to either accept or decline a portion, or all, of the late disbursement. If no response is received within approximately two weeks of notification, the award will be 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 will be reduced by the amount of the return. Aid will be returned in the following order:

  1. Unsubsidized Direct Loan
  2. Subsidized Direct Loan
  3. Direct PLUS Loan
  4. Federal Pell Grants
  5. Federal Supplemental Educational Opportunity Grant

Fee Refund Versus School Return Amount

In most cases, the amount of the 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 Return amount. You will be responsible for paying this balance in addition to any other balance created form the student portion for the return.

Student Portion of Return 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
(Equals) 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.

Future Aid Eligibility

Withdrawing may affect your eligibility to receive financial aid in subsequent terms. Notify your respective Financial Aid office if you are planning to return.

If your loans should go into repayment once you withdraw form school, it is important to make your payments on time to prevent default. If you default on a loan, you would lose your eligibility for any future financial aid.

Satisfactory Academic Progress

Withdrawal form school may affect your Satisfactory Academic Progress standing and future eligibility for financial aid.

Cancellation of Registration

If you cancel your registration prior to the beginning of the term, you will not be considered a student for that term. If this occurs, you are not entitled to receive any form of financial aid during the term and your aid will be canceled and returned to the appropriate programs.

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 114 days):  Totally withdrew from all classes on 10/4/2019
    • Number of days attended: 50
    • Number of days in the semester: 114
    • Earned financial aid: 43.9%
    • Unearned financial aid: 56.1%

Types of Aid

Financial Aid Disbursed


Total Aid Earned

(Student eligible to keep)

Total Aid Unearned

(Must be repaid)

PA State Grant

$ 840.00

$ 840.00


Pell Grant



$ 241.00

Subsidized Student Loan




Unsubsidized Student Loan



$ 990.00