The law specifies how schools must determine the amount of Title IV program assistance a student earns if a payment period, or period of enrollment is not completed. The Title IV programs that are covered by this law are: Federal Pell Grants, Iraq and Afghanistan Service Grants, TEACH Grants, Direct Loans, Direct PLUS Loans, Federal Supplemental Educational Opportunity Grants (FSEOGs), and Federal Perkins Loans.

Though a student’s aid is posted to his/her account at the start of each period, the funds are earned as the period is completed. If a student does not complete his/her payment period (term for which aid has/is being disbursed), the amount of Title IV program assistance that a student has earned up to that point is determined by a specific calculation required by the Department of Education. If the student received (or the school or parent received on his/her behalf) less assistance than the amount earned, the student may be able to receive additional funds (post-withdrawal funds). If a student has received more assistance than has been earned, the excess funds must be returned by the school and/or the student.

The amount of assistance a student has earned is determined based on a return of Title IV calculation created by the Department of Education. For example, if a student completes 30% of his/her payment period, he/she earn 30% of the assistance they were originally scheduled to receive. Once a student has completed more than 60% of the payment period, 100% of the assistance a student was eligible to receive for that payment period is earned.

If a student has not yet received all of the funds earned within a payment period, he/she may be due a post-withdrawal disbursement. If the post-withdrawal disbursement includes loan funds, the school must get permission before it can disburse them. A student may choose to decline all or some of the loan funds in order to not incur additional debt. A school may automatically use all or a portion of a student’s post-withdrawal disbursement of grant funds for tuition, fees, and room and board charges (as contracted with the school for that payment period). The school must receive permission from the student to use the post-withdrawal grant disbursement for any other school charges. If permission is not granted (some schools ask for this when the student enrolls), the student will be offered the funds. However, it may be in the best interest of the student to allow the school to keep the funds to reduce the debt at the school.

There are some Title IV funds that a student may be scheduled to receive that cannot be disbursed once a student withdraws because of other eligibility requirements. For example, if a student loan has not been originated before the student withdraws, that loan may not be disbursed.

If a student (a student’s school or a student’s parent on behalf of the student) receives excess Title IV program funds that must be returned, the school must return the lesser of:

  • The amount of Title IV funds that the student does not earn, or 
  • The amount of institutional charges that the student incurred for the payment period or period of enrollment multiplied by the percentage of funds that was not earned.

The school must return this amount even if it did not keep this amount of a student’s Title IV program funds. If the school is not required to return all of the excess funds, the student must return the remaining amount. Any loan funds due from the student (or student’s parent for a Direct PLUS Loan) may be repaid in accordance with the terms of the master promissory note (MPN). That is, the student/parent make scheduled payments to the holder of the loan over a period of time.

Any amount of unearned grant funds that a student must return is called an overpayment. The maximum amount of a grant overpayment that a student must repay is 50% of the grant funds received or were scheduled to receive. A student does not have to repay a grant overpayment of $50.00 or less for grant overpayments resulting from the student’s withdrawal. Arrangements must be made with the school to return the unearned grant funds.

The requirements for Title IV program funds when a student withdraws are separate from any refund policy that a school may have. Therefore, a student may still owe funds to the school to cover unpaid institutional charges. Schools may also charge a student for any Title IV program funds that the school was required to return. If a student doesn’t already know a school’s refund policy, requirements and procedures for officially withdrawing from school, feel free to ask the school for a copy or click on the following links:

https://www.kckcc.edu/admissions/tuition-fees/refund-tuition-fees.html

https://www.kckcc.edu/student-resources/registrar/withdrawal.html

 

Contact

If students have questions regarding financial aid, please contact the Student Financial Aid Office at:

7250 State Avenue
Kansas City, KS  66112
finaid@kckcc.edu
913-288-7697