Policy for the Return of Title IV Funds

Process Overview and Applicability

The federal government mandates that students who withdraw or fail to complete all classes within a term of enrollment may only keep the financial aid they have “earned” up to the time of withdrawal. Any unearned aid must be returned even if it has already been disbursed.

Federal financial aid funds are awarded to a student under the assumption that the student will attend school for the entire period for which the assistance is awarded. When a student withdraws from all courses for any reason, the student may no longer be eligible for the full amount of Title IV funds that they were originally scheduled to receive. If a student has received Title IV financial aid, a refund to the program must be calculated under the Federal Return of Title IV Funds policy. Title IV refunds (Title IV Calculation) are based on the number of days attended for the semester, divided by the total number of days in the semester (minus any scheduled breaks of at least five days in length). Funds are deposited back to the financial aid program accounts in accordance with federal regulations.

Priority order for the return of federal funds is:

• Federal Unsubsidized Direct Loan
• Federal Subsidized Direct Loan
• Federal Direct PLUS Loan
• Federal Pell Grant
• Federal Supplemental educational Opportunity Grant (SEOG)
• Any other Federal Grant Programs

60% Rule

After the 60% point in the payment period or period of enrollment, a student has earned 100% of the Title IV funds the student was scheduled to receive during the period. For a student who withdraws after the 60% point-in-time, there are no unearned funds.

To calculate the 60% of enrollment period, HSU counts the number of days from the first day of class until the last date a student was enrolled and compares that to the total calendar days of their scheduled enrollment for the term. This includes the first day of classes through the last scheduled day of exams, including weekends and holidays, and excluding any scheduled breaks of at least five consecutive days.

Hardin-Simmons University is required to return a portion of federal aid if a student withdraws on or before completing 60% of the semester.

Withdrawal Date Determination

Hardin-Simmons University is not required to take attendance, therefore when a student who withdraws, without providing notification, from a school that is not required to take attendance, the school must determine the withdrawal date no later than 30 days after the end of the earlier of (1) the payment period or the period of enrollment (as applicable), (2) the academic year, or (3) the student’s educational program. 34 CFR 668.22(j)(2)

The types of withdrawals that fall under the return to Title IV (R2T4) federal calculation regulations are:

1. Official Withdrawals – student withdrawing from all courses should contact the Registrar’s Office to initiate an official withdrawal. This establishes an official withdrawal date.
2. Unofficial Withdrawal – If a student who began attendance and who has not officially withdrawn and fails to earn a grade in at least one course offered over an entire period, will be considered to have an unofficial withdrawal for Title IV purposes. HSU will establish the unofficial with draw date no later than 30 days after the end of the earlier of (1) the payment period or the period of enrollment (as applicable), (2) the academic year, or (3) the student’s educational program. 34 CFR 668.22(j)(2)

Title IV calculation is based on the period of enrollment to which a student completes.  For Title IV purposes, the last date of attendance is one of the following:

• The date the formal withdrawal process begins in the Registrar’s Office
• The date the student otherwise provides official notification of their intent to withdraw (i.e., letter, email, in-person). In all cases, the student should be referred to the Registrar’s Office to complete the official withdrawal process.
• The last documented date of attendance in an academically related activity (i.e., documented attendance in a class or lab or submissions of an assignment in an online course).

Federal regulations state that you must attend class and successfully complete the course in order to be eligible for financial aid. Students must be actively pursuing and successfully complete the term(s) for which they are enrolled.  If a student withdraws from all classes or is reported as not attending, financial aid may need to be recalculated because the student may no longer be eligible for the originally awarded amount.

Return of Title IV Procedures for Term Completion of all F’s

Per federal regulations, if a student fails to earn a passing grade in at least once course within the payment period, the institution must assume that the student has unofficially withdrawn unless there is documentation that the student completed the period.

1. Non-attendance notifications will be initiated by faculty, registrar or advising center.  Financial aid will receive non-attendance notification via hard copy or email or via the Office of Student Engagement.  This notification will go to the Director of Financial Aid.
2. Student will be evaluated at the end of the long term to determine if completion of the term existed.  A student must complete at least one semester hour to have completed the term.  A term ending in all F’s as a result of non-attendance will require a R2T4 calculation.
3. Should a non-attendance date not be determined (as indicated in #1 above), 50% (midpoint of the semester) will be used for the return calculation.  The regulations provide that the percentage of Title IV aid that is earned by the student is equal to the period completed by the student, should that period be determined.  It is to be noted that the “60%” rule still applies. If the determined period is more than 60%, then the student is considered to have earned 100% of the Title IV aid but only if a non-attendance date can be determined and verified; otherwise, the financial aid office is required to use 50%.
4. Student will be notified by the Director of Financial Aid regarding the possible return of funds at the first notification of non-attendance and then again after mid-term progress reports are generated.
5. The refund calculations will be done no earlier than the last day of class and no later than 3 business days after final grades are posted.  All monies to the appropriate entities will be returned and holds placed on the student account.  Letters will be sent to students where funds were returned.  The return of funds may create a balance due on the student account.  Students owing balances will not be allowed to receive transcripts or register for future terms until the balance has been cleared.

R2T4 Formula Calculation

The percentage of financial aid the student is eligible for is determined by the following:

1. The financial aid office determines if Title IV aid has been awarded. If yes, the R2T4 is calculated in COD.
2. If less than 60% of the enrollment period has yet to expire, a pro rate schedule must be used to determine the amount of Title IV funds that a student has earned at the time of withdrawal.
3. After the 60% point of the enrollment period, a student has earned 100% of the Title IV funds.
4. The number of days attended divided by the number of days in the payment period.
5. If less than 60% of the enrollment period has yet to expire, a pro rate schedule must be used to determine the amount of Title IV funds that a student has earned at the time of withdrawal.  After the 60% point of the enrollment period, a student has earned 100% of the Title IV funds.
6. Official Return to Title IV procedure calculations are initiated by Director of Financial Aid (or assigned delegate) via pro rata refund software approved by the Department of Education.
7. Director of Financial Aid (or assigned delegate) completes refund worksheet in COD.
8. Director of Financial Aid (or assigned delegate) places holds on student account to prevent any credit refunds from being issued should disbursements have already been made.  Notes are made regarding refund calculation amounts.
9. Student is notified that he/she must complete Exit Counseling.  Exit Counseling is available on-line at https://studentaid.gov/exit-counseling/
10. A notification is sent to the student notifying him/her of amount/s to be returned.

Post-Withdrawal Disbursements

If a student has accepted Title IV aid by the date of the withdrawal, but the financial aid has not disbursed, the student may be eligible for a post-withdrawal disbursement. If the amount disbursed to the student is less than the amount the student earned, and for which the student is otherwise eligible, he or she is eligible to receive a post-withdrawal disbursement for the earned aid that was not received. Under these circumstances, a R2T4 calculation must be performed to determine whether the student is eligible for a post-withdrawal disbursement. HSU must make this determination within 30 calendar days after the student withdraws.

The following conditions apply when processing a post-withdrawal disbursement:

1. A student must not fail to meet Satisfactory Academic Progress.
2. A student must have accepted Title IV loans by the date of the withdrawal.
3. If, before the student’s withdrawal date a loan offer has been accepted, the loan must also have been originated by HSU. Loans are not originated by HSU unless the student has accepted the loan.
4. If the student is eligible for a post-withdrawal disbursement of a loan, the Financial Aid Office must send notification of post-withdrawal disbursement eligibility to students within 30 calendar days after the student withdraws. Students will be given a minimum of 14 calendar days to respond to the post-withdrawal disbursement offer.
5. HSU will disburse any Title IV grant funds a student is due as part of a post-withdrawal disbursement within 45 calendar days of the date HSU determined the student withdrew and disburse any loan funds a student accepts by the post withdrawal disbursement deadline within 180 calendar days of the withdrawal date. The school must obtain written permission from the student before loan funds can be disbursed.
6. A school cannot make a post-withdrawal disbursement to a deceased student or a student who has not signed the loan’s promissory note. The loans promissory note must be signed prior to the student accepting the loan. The student cannot accept the loan after they have withdrawn.
7. If the student is in verification, this must be completed within 120 calendar days from the date of withdrawal.

Returning Unearned Funds

The University is required by federal statute to determine what portion, if any, of that student’s financial aid is to be refunded to the financial aid program(s) in which that student participated.  Priority order for the return of federal funds is:

• Federal Unsubsidized Direct Loan
• Federal Subsidized Direct Loan
• Federal Direct PLUS Loan
• Federal Pell Grant
• Federal Supplemental educational Opportunity Grant (SEOG)
• Any other Federal Grant Programs

If a student leaves the institution having only completed 60% or less 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.
• A student has “earned” 100% of his/her Title IV funds at the 60% point in the term, but the financial aid office is required to perform the calculation in this case as well.  A student receiving all “F’s” due to nonattendance is withdrawn using the R2T4 50% rule if no date of last attendance can be determined.

Federal law and university policy dictate that calculated amounts to be returned to the respective programs when a withdraw occurs. Therefore, withdrawal may mean the loss of part or all federal, state, or institutional aid.

• Unfunded institutional awards (HSCH awards) will be prorated by the same amount as tuition for the first 24 days of the enrollment period.
• TEG will be swapped with the Simmons Exchange Grant and prorated by the same amount as tuition for the first 24 days.
• After the first 24 days, a student earns 100% of their unfunded institutional award amounts since tuition is retained at 100%. However, a student cannot receive a credit refund as a result of institutional aid after a withdrawal has been processed.
• Also, a refund may occur when eligible federal aid is due in the term but has not been disbursed to the student account at the time of withdrawal.  This allows for payment of classes in which no credit is received.  However, a withdrawing student’s remaining aid may not create a credit balance from institutional awards during the refund periods.
• Further, awarding professors may wish to redistribute departmental scholarships to other students, in which case the award may be reversed in the withdrawing student’s account. This action is not a prerogative of the financial aid office.

The proration of institutional aid per the business office refund policy is as follows:

1-4 Week Course Terms

5-8 Week Course Terms

9-16 Week Course Terms

Student Responsibilities

Any student receiving Title IV financial aid is advised to speak with a financial aid officer when attempting to withdraw from the University.  This is to ensure that the correct amount owed to each financial aid program is determined and returned as soon as possible.

Any student who receives a student loan must complete loan exit counseling upon withdrawing from a University.  Due to this requirement Hardin-Simmons will hold a student’s transcripts and all other information for release from the University until exit counseling has been confirmed.  Loan exit counseling can be completed on the internet at https://studentaid.gov/exit-counseling/

The requirements for Title IV program funds when student a withdraws are separate from the institutional refund policies.

Overpayment Resolution

HSU will return funds on behalf of a student who owes a Title IV grant overpayment and consider the returned funds as the student’s debt to the institution. The HSU Business Office will determine whether the university will enter into a repayment agreement with the student.

Withdrawals may also affect future financial aid eligibility. Students may select one of the following options to pay outstanding balance:

• Pay entire balance
• Make payment arrangements