Policy 4.08
Return of Financial Aid Funds
Part 1. Purpose
This policy establishes Minneapolis College’s guidelines for the return of Title IV and Non-Title IV financial aid funds.
Under this policy, students earn financial aid in proportion to the time they are enrolled up to, and including, the 60% point. Financial aid recipients who completely withdraw or stop attending prior to, and including, the 60% point of the term are subject to the federal return of Title IV funds rules and the Minnesota Office of Higher Education refund calculation for state financial aid.
The student may be required to repay a portion of the financial aid they received.
The student may be owed a disbursement of financial aid funds after withdrawal if certain conditions are met.
Part 2. Definitions
The following definitions are used in this policy.
Date of Determination: This is the date the College determines the student started the withdrawal process from the College. This is regulated and formulated by federal law and can vary based on withdrawal circumstances.
Non-Title IV Funds: State or agency-funded aid such as Minnesota State Grant, Minnesota SELF Loan, etc.
Title IV Funds: Federally funded aid such as the Federal Pell Grant, Federal Supplemental Educational Opportunity Grant (SEOG), or Federal Subsidized and Unsubsidized Loans.
Part 3. Return of Title IV Funding (34 CFR 668.22)
This policy applies to any student who receives Title IV funding and ceases to be enrolled before the end of a period of enrollment (e.g. Fall, Spring, or Summer Semester). A student is considered to have withdrawn if the student does not complete all the days in a period of enrollment that the student was scheduled to complete. Federal regulations require the College to calculate the return of Title IV refunds within 30 days of determining the student has withdrawn from all federal aid eligible courses.
Title IV funds are awarded to a student under the assumption that the student will attend courses for the entire period for which the assistance is awarded. When a student withdraws, the student may no longer be eligible for the full amount of Title IV funds that the student was originally scheduled to receive.
Regardless of whether or when the student begins the official withdrawal process or whether the student gives oral, written, or electronic notification to the College of their intent to withdraw; if a student ceases attendance from all Title IV eligible courses in a given period of enrollment, the student is considered a withdrawal for Title IV purposes.
The last date of attendance/participation in the course is used to determine the withdrawal date, whether the withdrawal is official (student actively withdraws) or unofficial (instructor records a last date of attendance which results in a withdrawal). The U.S. Department of Education (DoE) Return of Title IV Funds formula determines the amount of Title IV Funds a student has based on the amount of time the student spent in attendance up until the date the student ceased attendance/participation. Federal regulations require the College to calculate the return of Title IV refunds within 30 days of determining the student’s official or unofficial withdrawal date.
The amount of Title IV funds a student earns is a proportional calculation based on the number of days the student attends courses through 60% of the term. For example, if a student withdraws after completing 30% of the term, they are entitled to keep approximately 30% of their financial aid and 70% must be repaid.
If a student ceases to attend courses after the 60% point, a student has earned 100% of the Title IV funds the student was scheduled to receive during the period. (Note: this may differ if a student is enrolled in short-term courses, and thus the period of enrollment differs from the standard term.)
If the amount of Title IV funds disbursed to the student is greater than the amount a student earned, the unearned funds must be returned within 45 days of the date of determination.
Subpart A. Order of Return of Title IV Funds
Per federal regulation, the College returns the unearned share of Title IV Funds in the following order, up to the net amount disbursed from each:
- Unsubsidized Federal Direct loans
- Subsidized Federal Direct loans
- Federal PLUS loans
- Federal Pell Grant
- Federal SEOG (grant)
- Other Title IV grant or loan assistance
Subpart B. Credit Balance
If there is an existing credit balance at the time of withdrawal, the College is required to perform the Title IV withdrawal calculation (referred to as an R2T4 calculation) to determine whether adjustments to the credit balance are required. If a credit balance remains after the R2T4 calculation it will be disbursed within 14 days of the R2T4 calculation.
Subpart C. Student Responsibility
A student may be responsible for all or a portion of the refund back to the DoE.
By applying for a Federal Direct Loan, a borrower authorizes the school to pay directly to the Secretary of the DoE that portion of a refund or return of Title IV, Higher Education Act (HEA) program funds from the school that is allocable to the loan.
Therefore, a school must pay that portion of the student's refund or return of Title IV, HEA program funds that is allocable to a Federal Direct Loan to the DoE. Because of this, the College:
- Will provide simultaneous written notice to the student/borrower if the school pays a refund or return of Title IV, HEA program funds to the DoE on behalf of that student.
- Then, the College will collect the portion of loan funds returned to the DoE from the student.
Subpart D. Post Withdrawal Disbursement
Per federal regulation, a student may be owed a disbursement of Title IV funds after the withdrawal date if the conditions for Post-Withdrawal Disbursement are met. If the amount of Title IV funds disbursed (if any) is less than the amount the student earned, the student is eligible for a post-withdrawal disbursement.
A post-withdrawal disbursement of federal grant funds will automatically be applied to tuition and fees within 45 days of the date of determination of the withdrawal.
If a student is eligible for a post-withdrawal of loan funds, a notice will be sent to the student within 30 days of the date of determination of the withdrawal. The student must notify the College within 45 days that they want the loan applied to their account. Written permission from the student is required before loan funds can be dispursed.
Part 4. Return of Non-Federal Financial Aid
Refunds for state aid programs and non-state aid programs are calculated on a proportional basis using the state-mandated or institutional refund policy. State financial aid programs are refunded to the Minnesota Office of Higher Education/ State of Minnesota. To calculate the minimum refund for the Minnesota State Grant Program, the SELF Loan program, and other state aid programs (except the Minnesota State Work-Study program), the Minnesota Office of Higher Education Refund Calculation Worksheet is used.
Owner(s) Title: Vice President of Student Affairs
Date of Adoption: Original date not currently documented.
Date of Implementation (if different from adoption date): N/A
Date Last Amended: 10/2/2024 (Focused Review)
History and Subject of Revisions: 10/2/2024 (Focused Review. Revisions implemented due to Department of Education feedback. Revisions include: additions to improve clarity; adding a definition for “date of determination;” removing a section referencing SAP; adding information regarding timelines/deadlines for steps and actions; adding information regarding withdrawal calculations; and adding more information around student responsibilities,), 4/22/2024 (Limited review), 05/20/2021 (Comprehensive review, added purpose and definitions), 2/26/2016
Regulatory Authority (e.g. Minnesota State policy, federal or state law): Federal Regulatory Code: 34 CFR 668.22,