Return of Title IV Aid Policy
How a Withdrawal Affects Financial Aid
Federal regulations require Title IV financial aid funds to be awarded under the assumption that a student will attend the institution for the entire period in which federal assistance was awarded. When a student withdraws from all courses for any reason, including medical withdrawals, he/she may no longer be eligible for the full amount of Title IV funds that he/she was originally scheduled to receive. The return of funds is based upon the premise that students earn their financial aid in proportion to the amount of time in which they are enrolled. A pro-rated schedule is used to determine the amount of federal student aid funds he/she will have earned at the time of the withdrawal. Thus, a student who withdraws in the first month of classes has earned less of his/her financial aid than a student who withdraws in the seventh week. Once 60% of the semester is completed, a student is considered to have earned all of his/her financial aid and will not be required to return any funds. Federal law requires schools to calculate how much federal financial aid a student has earned if that student:
- Completely withdraws
- Stops attending before completing the semester
- Does not complete all modules (courses which are not scheduled for the entire semester or payment period for which he/she has registered at the time those modules began)
Based on this calculation, students who receive federal financial aid and do not complete their classes during a semester or term, could be responsible for repaying a portion of the aid they received. Students who do not begin attendance, must repay all financial aid disbursed for the term.
How the Earned Financial Aid is Calculated
Students who receive federal financial aid, must "earn" the aid they receive by staying enrolled in classes. The amount of federal financial aid assistance the student earns is on a pro-rated basis. Students who withdraw or do not complete all registered classes during the semester, may be required to return some of the financial aid they were awarded.
Institutions, in accordance to federal regulation 34CFR668.22, are required to determine the percentage of Title IV aid "earned" by the student and to return the unearned portion to the appropriate aid programs. Regulations require schools to perform calculations within 30 days from the date the school determines a student has withdrawn. The school must return the funds within 45 days of the calculation. The Return of Title IV calculation process, and return of funds is completed by the Office of Financial Aid.
For example, if a student completes 30% of the payment period, they earn 30% of the aid they were originally scheduled to receive. This means that 70% of the scheduled awards remain "unearned" and must be returned to the federal government.
Once 60% of the semester is completed, a student is considered to have earned all of his/her financial aid and will not be required to return any federal funds. The following formula is used to determine the percentage of unearned aid that has to be returned to the federal government:
- The percent earned is equal to the number of calendar days completed up to the withdrawal date, divided by the total calendar days in the payment period (less any scheduled breaks that are at least 5 days long)
- The payment period is the entire semester. However, for students enrolled in modules (courses which are not scheduled for the entire semester or term), the payment period only includes those days for the module(s) in which the student is registered
- The percent unearned is equal to 100 percent minus the percent earned
For students enrolled in modules:
A student is considered withdrawn if the student does not complete all of the days in the payment period that the student was scheduled to complete. Molloy College will track enrollment in each module to determine if a student began enrollment in all scheduled courses. If a student officially drops courses in a later module while still attending a current module, the student is not considered as withdrawn based on not attending the later module. However, a recalculation of aid based on a change in enrollment status may still be required.
Students who provide written confirmation to Molloy College at the time of ceasing attendance in a module, that they plan to attend another course later in the same payment period, are not considered to have withdrawn from the term. Note: written confirmation of a later class is required; registration alone does not meet this requirement. If the student does not provide written confirmation of plans to return to school later in the same payment period or term, Molloy College considers the student to have withdrawn and begins the R2T4 process. However, if the student does return to Molloy College in the same term, even if they did not provide written confirmation of plans to do so, the student is not considered to have withdrawn and is eligible to receive the Title IV funds for which the student was eligible before ceasing attendance. The Office of Financial Aid will then reverse the R2T4 process and provide additional funds that the student is eligible to receive at the time of return.
Steps in the Return of Title IV Funds Policy:
Step 1: Student's Title IV information
The Office of Financial Aid at Molloy College will determine:
- The total amount of Title IV aid disbursed for the semester in which the student withdrew. A student's Title IV aid is counted as aid disbursed to the student's account on or before the date the student withdrew
- The total amount of Title IV aid disbursed plus the Title IV aid that could have been disbursed for the semester in which the student withdrew
Step 2: Percentage of Title IV aid earned
The Office of Financial aid at Molloy College will calculate the percentage of Title IV aid earned as follows:
- The number of calendar days completed by the student divided by the total number of calendar days in the semester in which the student withdrew. The total number of calendar days in a semester shall exclude any scheduled breaks of more than five days.
Days Attended ÷ Days in Enrollment Period = Percentage Completed
If the calculated percentage completed exceeds 60%, then the student has "earned" all the Title IV aid for the enrollment period.
Step 3: Amount of Title IV aid earned by the student
The Office of Financial Aid will calculate the amount of Title IV aid earned as follows:
- The percentage of Title IV aid earned (Step 2) multiplied by the total amount of Title IV aid disbursed or that could have been disbursed for the term in which the student withdrew.
Total Aid Disbursed and that Could Have Been Disbursed × Percentage Completed = Earned Aid
Step 4: Amount of Title IV aid to be disbursed or returned
- If the aid already disbursed equals the earned aid, no further action is required
- If the aid already disbursed is greater than the earned aid, the difference must be returned to the appropriate Title IV aid program
Total disbursed Aid - Earned Aid = Unearned Aid to be Returned
If the aid already disbursed is less than the earned aid, a post-withdrawal disbursement will be calculated. If a student is eligible for a post-withdrawal disbursement, funds earned prior to withdrawal, which may include loan funds, the student may choose to decline the loan funds to avoid incurring additional debt. If eligible, Molloy College, will send notification of the action required to either accept or decline a portion, or all, of the late disbursement. Molloy College may automatically use all or a portion of the post-withdrawal disbursement (including loan funds, if the student accepts the funds) for tuition, fees and charges, as stated in the federal policy.
Determination of the Withdrawal Date
The withdrawal date used in the return calculation of a student's federal financial aid is the actual date indicated on the official withdrawal form. As a school that is required to take attendance, due to our attendance policy, Return of Title IV calculation is based on the last date of attendance, as reported by the professor.
Withdrawing Prior to Completing 60% of a Term
Unless a student completes 60% of the term in which federal aid was disbursed, the student will be required to return all or part of the financial aid disbursed for the term. This applies to students who have officially or unofficially withdrawn.
When a Student Fails to Begin Attendance
If a student receives financial aid, but never attends classes, Molloy College will return all disbursed funds to the respective federal aid programs. If the student owes any money to Molloy College, resulting from the return of federal funds, the student will be billed by the Bursar's Office. If the student does not pay the funds due to Molloy College, a financial hold is placed on the student's account. As a result, the student will not be permitted to register for classes or receive transcripts until the balance is paid.
Definition of an academic related activity
Examples of a Molloy College academic-related activities include but are not limited to physically attending a class where there is an opportunity for direct interaction between the instructor and students. Academic attendance includes, but is not limited to:
- Physically attending a class
- Submitting an academic assignment
- Taking an exam, an interactive tutorial, or computer-assisted instruction
- Attending a study group assigned by the school
- Participating in an online discussion about academic matters
- Initiating contact with a faculty member to ask a question about the academic subject studied in the course
Documentation not acceptable as proof of participation:
- Student's self-certification of attendance that is not supported by school documentation
- Living in institutional housing
- Participating in the school's meal plan
- Participating in a student-organized study group
- Logging into an online class without active participation
- Participating in academic counseling or advising
Student notification of repayment
A notification letter outlining the amount returned to the federal programs will be mailed to the student's permanent address. The Office of Financial Aid at Molloy College will return funds on the student's behalf to the appropriate federal aid programs, and as a result may subsequently bill the student's bursar account. A statement reflecting these charges will be sent to the student. The student is responsible for all charges and overpayments resulting from a Return of Title IV calculation. Repayment to federal aid programs Federal regulations require that the following aid programs be subject to the repayment calculation in the following order if the student did not attend 60% of the term:
- Federal Direct Loans: Unsubsidized
- Federal Direct Loans: Subsidized
- Federal Perkins Loans
- Federal Direct Grad PLUS Loans
- Federal Direct Parent PLUS Loans
- Federal Pell Grant
- Federal Supplemental Educational Opportunity Grant (FSEOG)
- TEACH Grant
- Iraq and Afghanistan Service Grant
Overpayment of federal grant funds
Federal regulations provide that 50% of the unearned amount of all federal grants is protected by the federal calculation. Any grant amount subject to repayment is returned by the Office of Financial Aid at Molloy College, and that amount will be billed to the student's bursar account as a debt to the Molloy College. School and student responsibility for return of unearned federal funds The student and the school are both responsible for returning unearned federal financial aid to the federal government. The student will be billed for any amount due as a result of the return of federal aid funds (R2T4) calculation.
School and student responsibilities in regard to the R2T4 Policy & Process
Molloy College's responsibilities in regard to the Return of Title IV funds:
- Providing each student with the information given in this policy
- Identifying students affected by this policy and completing the Return of Title IV Funds (R2T4) calculation
- Informing the student of the result of the R2T4 calculation and any balance owed to Molloy College as a result of a required return of funds
- Returning any unearned Title IV aid that is due to the Title IV programs
- Notifying student and/or Plus borrower of eligibility for a Post-Withdrawal Disbursement, if applicable
Student's responsibilities in regard to the Return of Title IV funds:
- Becoming familiar with the Return of Title IV Funds (R2T4) policy and how withdrawing from all courses effects eligibility for Title IV aid
- Resolving any outstanding balance owed to Molloy College resulting from a required return of unearned Title IV aid
- Resolving any repayment to the U.S. Department of Education as a result of an overpayment of Title IV grant funds
Additional information to consider when withdrawing:
- If you are receiving federal financial aid and are withdrawing or taking a leave for one or two semesters off, your aid will be prorated based on your last date of attendance. If your aid changes, you will receive a revised award notification and a revised bill (See Molloy College Catalog - Bursar Section)
- If you are receiving federal aid, it may be affected for the following semester due to Federal Academic Progress Requirements
- If you are receiving state aid (Tuition Assistance Program -TAP), it may be affected the following semester due to State Academic Progress Requirements
- If you have received or are receiving federal student loans, your Grace Period (6 months for most loans) will begin with the last day of attendance. As an example, if you are out of school for 3 months your Grace Period will be reduced by 3 months
If you are withdrawing officially from the College and have taken student loans, you must complete an Exit Counseling at: Student Loans.
If you are having financial difficulty and need to speak to a Financial Aid Counselor, please do not hesitate to make an appointment with our office.
For more information concerning Molloy College Registrar's withdrawal process please visit our Registrar.
For more information concerning tuition and fees please visit Bursar.
Note: The procedures and policies listed above are subject to change without advance notice based on changes to federal laws, federal regulations, or school policies. If changes are made, student must abide by the most current policy. The Federal Refund Policy (R2T4) is very encompassing and this is intended to be an overview of the policies and procedures that govern regulations pertaining to Title IV Refund (R2T4). For further guidance on R2T4 policies and procedures please see the reference material found in Volume 5 of the Federal Student Aid Handbook under Withdrawals or visit IFAP.