Return of Federal Financial Aid Policy
Student who receive federal financial aid (Pell and/or
Stafford loans) and do not complete their program could be responsible to repay
a portion of the aid received according to federal law. The following information will help you
understand what could happen if you withdraw from, stop attending classes, or
are dismissed before the end of the program for which you are receiving federal
financial aid. Students may be required
to repay Pell grant/Student loan funds received for attendance in addition to
any funds required to be returned by the school.
What is the Law?
Federal law requires school to calculate how much federal financial aid (Title IV Funds) a student has earned if he/she leaves school before completing the class within 45 days of the original drop. Mid-East CTC – Adult education will determine this calculation and return funds or make a post-withdrawal disbursement within the 45 day period.
Who is affected by this regulation?
This regulation applies to any student who receives federal
financial AND who withdraws, stops attending or is dismissed from classes prior
to reaching the 60% completion point of a class payment period and is based on
How do I earn my financial aid?
Aid is earned by the student by staying in class and
completing clock hours scheduled. The
percentage of Title IV financial aid earned by the student is proportionate to
the number of hours the student remains enrolled. The percentage of Title IV funds to be
returned is equal to the number of clock hours attended in a payment period
divided by the number of hours that were scheduled. For example, if a student has completed 30%
of the payment period they have earned 30% of their financial aid. However, one a student has completed more
than 60% of the hours in a billing period, 100% of the financial aid awarded
that payment period will have been earned.
Calculations & Post/withdrawal Disbursements
Mid-East CTC – Adult Education will use the official withdraw date (see withdrawal policy) to complete the R2T4 calculations to determine whether funds need to be disbursed or returned. In most cases, only refunds will be completed; however, in the even that funds are not drawn in before a student drops and aid is earned a post withdrawal disbursement will have to be completed. If a student is receiving only Pell Grant funds in a post withdrawal disbursement Mid-East will automatically draw in funds on behalf of the student within 30 days of the determination. If loan funds can be part of the post withdrawal, the student’s consent in writing must be present in order to draw funds. This notification will include borrower rights, all aid that is eligible to be disbursed, amount owed to the school and the amount student will have to pay if disbursement is rejected.
The calculation of Title IV funds earned by the student has no relationship to the student’s incurrent institutional charges. (See Refund Policy and Payment of Account Charges).
Order of Return of Title IV Funds:
Funds that are required to be returned to the U.S.
Department of Education must be returned in the following order. 1.
Unsubsidized loans; 2. Subsidized loans: 3. Direct PLUS loans; and 4.
The student will be responsible for any outstanding balances owed Mid-East CTC – Adult Education that Title IV (financial aid) funding did not cover after R2T4. Upon request, worksheets used to determine
the amount of refund or R2T4 are available in Financial Aid Office.