Bulletin - John Jay College Of Criminal Justice - CUNY

FINANCIAL AID
WITHDRAWALS AND THE RETURN OF
TITLE IV FUNDS
As part of the Higher Education Amendments of 1998, Congress
passed new provisions governing what happens to a student’s federal
financial assistance if a student completely withdraws from school in
any semester. The policy covers all federal loan programs, including
Federal Perkins Loan and Federal Direct Loans, but does not affect
Federal Work Study.
During the first 60 percent of the term, students earn Title IV funds in
proportion to the time they are enrolled. If a student receives more
aid than he/she earned, the unearned portion must be returned to the
Department of Education. If a student receives less aid than the
amount earned, he/she may be eligible for a late disbursement. The
new law assumes that a student “earns” federal financial aid awards
directly in proportion to the number of days of the term the student
attends classes. If a student completely withdraws from school
during a term, the school must calculate according to a specific
formula the portion of the total scheduled financial assistance the
student has earned and is therefore entitled to receive up to that point
in time. If a student receives (or the College receives on the student’s
behalf) more assistance than the student has earned, the unearned
excess funds must be returned to the Department of Education. If, on
the other hand, the student receives (or the College receives on the
student’s behalf) less assistance than has been earned, the student
may be able to receive those additional funds.
The portion of federal grants and loans a student is entitled to receive
is calculated on a percentage basis by comparing the total number of
days in the semester to the number of days the student completed
before withdrawing from classes. For example, if a student
completes 30 percent of the semester, the student earns 30 percent of
the assistance the student was originally scheduled to receive. This
means that 70 percent of the scheduled awards remain unearned and
must be returned to the federal government.
student’s assistance. If a student completely withdraws (either
officially or unofficially) before this point, the student may have to
return any unearned federal funds that may have already been
disbursed.
If a student has received excess funds that must be returned, the
College shares with the student the responsibility of returning those
excess funds. The College portion of the excess funds to be returned
is equal to the lesser of
• the entire amount of the excess funds, or
• the student’s total tuition and fee charges multiplied by the
percentage of unearned funds.
If the College is not required to return all the excess funds, the
student must return the remaining amount. Any loan funds that a
student must return must be repaid according to the terms of the
student’s promissory note. If a student must return any grant funds,
the law provides that the amount to be repaid be to be reduced by 50
percent. This means that the student only has to return half of any
excess funds he/she receives.
Any amount that a student has to return is considered a federal grant
overpayment. The student must either return that amount in full or
make satisfactory arrangements with either the College or the
Department of Education to repay the amount. The student must
complete these arrangements within 45 days of the date of the
College’s notifying him/her of the student’s overpayment status or
risk losing eligibility for further federal financial assistance.
Once a student has completed more than 60 percent of the semester,
the student can be said to have earned all (100 percent) of the
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