Return of Federal Funds
Return of Funds Policy for Federal Title IV Financial Aid Recipients Who Withdraw
Background: When a student withdraws from Marian University after a financial aid payment period has begun, the school, the student, or both may be required to return a calculated portion of the federal student aid funds awarded to him/her for that payment period.
Attendance & the Date of Withdrawal: For the purposes of this policy, the Office of Financial Aid will use attendance records maintained by the Office of the Registrar to determine the last date of attendance for a withdrawn student. These attendance records will be used for both Official Withdrawals (the student notifies the Office of the Registrar of his/her intent to withdraw) and Unofficial Withdrawals (the student simply stops attending classes). If there is no record of attendance, all of the student’s financial aid for that payment period will be returned and/or canceled, and the student will be responsible for any balance due.
Scheduled Breaks: Breaks during the payment period that are 5 or more days in length are not included in calculations made under this policy. Thanksgiving Break in the Fall and Spring Break in the Spring are examples.
Percentage of Aid Earned by the Student: This is determined by dividing the number of days in the financial aid payment period that the student attended by the total number of days in the payment period. A student who is otherwise eligible for Title IV financial aid is considered to have “earned” a percentage of that aid that is equal to the percentage of the payment period that the student attended. This earned amount of aid is the amount the student is allowed to retain on his/her student account.
The 60% Rule: According to federal regulations, a student who is found to have attended for more than 60% of the payment period has earned all of his/her Title IV aid in that payment period.
Unearned Aid: The amount of earned aid calculated above is subtracted from the total amount of Title IV financial aid for that student for that payment period. The result of this calculation is the amount of “unearned” aid, and this is what must be returned to the US Department of Education.
Unearned Aid to be Returned by Marian and Order of Return: The amount of unearned aid is compared to the amount of unearned institutional charges, and Marian is responsible for returning to the federal government the lesser of these two amounts. Unearned aid is returned in this order: Unsubsidized Direct Loans, Subsidized Direct Loans, Federal Perkins Loans, PLUS Loans, Pell Grants, SEOG, TEACH Grants, Iraq and Afghanistan Service Grants.
Unearned Aid to be Returned by the Student: It is possible that the student will be required to return funds to the federal government as well. In most cases, this will be the amount of Title IV aid funds a student received in the form of a refund check for non-institutional expenses multiplied by the percentage of Title IV aid that was unearned. If these are loan funds, the student simply repays the loan during the course of normal student loan repayment, according to the terms of the Master Promissory Note. If these are grant funds, the student is only responsible for repaying the amount exceeding 50% of the total grants for that payment period. Marian will in this case return the funds to the federal government and bill the student for payment.
Timelines: The Office of Financial Aid will respond to notification of student withdrawals as soon as possible. Due to increased workloads at various times of the year, there may be some delay in performing these withdrawal calculations. Federal regulations require that the calculations be performed, and that the school return all Title IV funds for which it is responsible, no more than 45 days after the date upon which it was determined that the student withdrew.
Post-Withdrawal Disbursements: In certain cases, a student may still be entitled to a disbursement of Title IV aid after he/she has withdrawn. The Office of Financial Aid will use the processes above to determine if this is the case for each student who withdraws. In these cases, within 45 days of the determination that the student withdrew, Marian will disburse any grant funds for which the student is eligible to his/her account and issue a check for any resulting credit balance (after any tuition, fees, and/or room and board charges for that payment period are addressed). If the student is due a post-withdrawal disbursement of any loan funds, Marian will notify the student within 30 days of the determination that the student withdrew. This notice will remind the student that he/she can accept all, a portion, or none of the funds, that any accepted funds would need to be repaid, and that the student has 14 days to respond. Should the student choose to accept any or all of the loan funds offered, Marian will have up to 180 days to disburse the loan funds to the student.
Worksheets Available: The US Department of Education has developed worksheets for schools to use to calculate the return of Title IV aid funds. Copies of these worksheets are available to interested parties through the Office of Financial Aid.
Please see the paragraphs below for further discussion of withdrawals. . .
A student who withdraws may be eligible to receive a refund of a portion of his/her tuition and/or housing charges. This University Refund Policy is administered by the Office of Business and Finance, is completely independent of the policy described on this page, and can be reviewed in detail in the annual Academic Bulletin.
The University Refund Policy runs for only several weeks at the beginning of each semester, but, as stated previously, federal regulations require the Office of Financial Aid to calculate the return of Title IV financial aid up to the point at which the student has completed more than 60% of the payment period. Students who have no balance due to Marian who withdraw deep into the semester frequently owe money back to Marian after the calculation is completed. This is because Marian has to return a portion of these students’ financial aid back to the federal government. This is especially true of students who were issued checks at the beginning of the semester because the amount of aid they accepted was greater than their institutional charges. Put another way, financial aid funds are paid to students at the beginning of each semester, but the amounts paid assume that each student will complete that semester. These amounts end up being invalid for students who don’t complete at least 60% of the semester.