1). Entering involuntarily on active duty into the armed services;
2). Illness of the student or in the immediate family of the student;
3). Death of the student or in the immediate family of the student; and
4). Involuntary transfer/change in work hours by the student’s employer which precludes continued attendance.
When students completely withdraw from school or stop attending school during a semester, the school must follow rules established by the federal government to determine the amount of financial aid earned.
• When students receive more Title IV funds than they have earned, the unearned portion must be returned to program accounts.
• When students have not received all of their earned Title IV funds, they may still receive disbursements of this aid.
Title IV funds include the following programs:
1. Federal Pell Grant
2. Federal Academic Competitiveness Grant
3. Federal Supplemental Educational Opportunity Grant (FSEOG)
4. DC LEAP
5. Federal Perkins Loan
6. Federal Stafford Loans (subsidized and unsubsidized)
Federal PLUS Loans
The school and the student share responsibility for returning unearned Title IV aid.
- • The school returns unearned Title IV funds that have been paid to the school to cover the student’s institutional charges.
- • The student returns unearned Title IV funds that he or she received from loan and/or grant funds.
- Returning Title IV funds to program accounts after the 100% tuition and fee refund period ends may cause students to owe charges to the school. Students must make arrangements with the Student Accounts Receivable Office to pay the debt.
Calculating Earned and Unearned Title IV Aid
If a student leaves MC prior to completing 60% of a payment period or term, the financial aid office recalculates eligibility for Title IV funds.
Recalculation is based on the percentage of earned aid using the following Federal Return of Title IV funds formula:
Percentage of payment period or term completed = the number of days completed up to the withdrawal date divided by the total days in the payment period or term. (Any break of five days or more is not counted as part of the days in the term.) This percentage is also the percentage of earned aid.
Funds are returned to the appropriate federal program based on the percentage of unearned aid using the following formula: Aid to be returned = (100% of the aid that could be disbursed minus the percentage of earned aid) multiplied by the total amount of aid that could have been disbursed during the payment period or term.
If students earn less aid than was disbursed, MC is required to return a portion of the funds and students are required to return a portion of the funds.
If students earn more aid than was disbursed, MC owes them a post-withdrawal disbursement which must be paid within 120 days of the student's withdrawal.
MC must return the amount of Title IV funds for which it is responsible no later than 45 days after the date of the determination of the date of the student’s withdrawal.
Refunds are allocated in the following order:
- Unsubsidized Federal Stafford Loans
- Subsidized Federal Stafford Loans
- Federal Perkins Loans
- Federal Parent (PLUS) Loans
- Federal Pell Grants for which a Return of funds is required
- Federal Academic Competitiveness Grant
- Federal Supplemental Opportunity Grants for which a Return of funds is required
- DCLEAP
Montgomery College uses the SCT Banner “Return of Title IV Funds” program to calculate earned and unearned Title IV aid when students withdraw from school. The software follows the format of the U.S. Department of Education’s (ED’s) recommended calculation worksheets for credit hour programs.
Period of Enrollment Dates for Academic Year 2007-08
Fall 2007 semester:
Start 9/5/2007
End 12/21/2007
Spring 2008 semester:
Start 1/22/2008
End 5/12/2008
Allowable Institutional Charges
Institutional charges for the period of enrollment (the semester) are tuition and required fees. Montgomery College is a commuter school and does not charge students for room and board.
The cost of books is considered an institutional charge for the purpose of calculating earned and unearned aid when the student uses an MC Book Credit to purchase books at an MC bookstore.
Students are not able to use their Book Credits of Title IV aid to pay for books outside of the MC bookstores. If the student does not purchase books with an MC Book Credit, the cost of books is not an institutional charge.
Example of Calculating Earned and Unearned Title IV Aid
David is an associate degree student at Montgomery College.
He was awarded $3,905 in Title IV aid for the Fall, 2007 semester. His aid was disbursed. He received:
- $2,155 Federal Pell Grant
- $1,750 Federal Stafford Loan
The semester is 15 weeks, or 103 days. For personal reasons, David withdrew on September 28, after completing 24 calendar days of the semester.
He completed 23% (24 divided by 103) of the enrollment period.
• Because he completed 23% of the semester, he also earned 23% of the Title IV aid the school awarded him for the semester.
• This means that David earned $898 in Title IV aid ($3,905 x23%).
• It also means that he didn’t earn 77% of his aid.
• As a result, $3,007 ($3,905 x 77%) is unearned aid that was disbursed and must be returned to Title IV program accounts.
Federal funds must be returned in a specific order – first to Title IV loans, and then to Title IV grants. In this case, $1,750 will be returned to David’s loan and $1,257 will be returned to his Pell Grant.
If the school used any of the $3,007 to pay David’s institutional charges, that portion of the money will be returned to David’s lender and to the Pell Grant program.
If David received any of the $3,007 in a refund check, he will repay the loan portion when he enters repayment on the entire loan.
The Pell portion will be repaid either to the school or directly to the U.S. Department of Education.
Rev. 6/07Page Content: Elford, GT Last Updated11/01/07
