BC3 Financial Aid - Withdrawal Policy

Federal Aid Refund Policy

 

The Financial Aid Office is required by federal statute to recalculate federal financial aid eligibility for students who withdraw, drop out, are dismissed, or take a leave of absence prior to completing 60% of a payment period or term.  The federal Title IV financial aid programs must be recalculated in these situations.  

If a student leaves the institution 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 a student earned less aid than was disbursed, the institution would be required to return a portion of the funds and the student would be required to return a portion of the funds. Keep in mind that when Title IV funds are returned, the student borrower may owe a debit balance to the institution.  

If a student earned more aid than was disbursed to him/her, the institution would owe the student a post-withdrawal disbursement which must be paid within 120 days of the student's withdrawal.   Refunds are allocated in the following order:  

1. Unsubsidized Federal Stafford Loans
2. Subsidized Federal Stafford Loans
3. Parent PLUS Loans
4. Federal Pell Grants for which a return of funds is required
5. ACG Grants for which a return of funds is required
6. Federal Supplemental Opportunity Grants for which a return of funds is required

 

The college returns any required funds directly to the appropriate program.  For loan programs, they are electronically sent to the loan servicer or mailed via check depending on the servicer.  The federal grant programs are electronically transferred back to the program through the college’s G5 system with the Department of Education.

If a student is required to pay loan funds back the policy is consistent with their MPN terms.  If the student is required to pay grant funds back, the college will inform the student by U.S. mail where to make the required payment (Department of Education).  The College will send the grant overpayment referral information to the Department of Education for reporting.