Financial Aid Refund/Withdrawal Calculations
The Higher Education Act of 1998 passed new provisions governing what must happen to a student’s federal student aid if he or she completely withdraws from school in any semester. The policy governs all federal grant and loan programs, including Federal Pell Grant, Federal SEOG, Federal Direct Loans (both subsidized and unsubsidized) and Federal Plus Loans to parents. Southern Vermont College institutional funding (SVC grants/scholarships) are not governed by this policy. Instead, they are prorated in accordance with the tuition charge for which the withdrawing student is responsible.
In general, students “earn” their financial aid awards directly in proportion to the number of days of the semester attended. If a student completely withdraws from school during a semester, 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 the time of withdrawal. If a student receives more assistance than the student earns, the unearned excess funds must be returned to the source from which they came.
If a student has completed more than 60% of the semester, he or she has earned 100% of their aid. If the student withdraws from the College (either officially or unofficially) before completing 60% of the semester, he or she may have to repay any unearned federal monies that were already disbursed. The Financial Aid office will determine the date corresponding to the 60% completion of each semester, and examples of the Title IV Refund Formula results will be available by contacting the Financial Aid Office.
A student’s withdrawal date will be determined by the College as the date the student began the College’s withdrawal process, or the date the student officially notified the College of the intent to withdraw; or the student’s last date of attendance at an academically-related event as documented by the College.
If the student has received excess funds that must be returned, the College shares with the student the responsibility of returning those excess funds. The College’s 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, depending upon whether the unearned funds were used to pay College charges or were refunded directly to the student.
If the College is not in possession of all the excess funds, the student must return the remaining amount. Any loan funds that the student must return must be repaid according to the terms of the promissory note. If the student must return grant funds, the law provides that the amount the student must repay is to be reduced by 50%. This means that only half of any excess funds received must be returned. If the return of unearned assistance causes any portion of the student’s tuition and fees to become uncovered, the College will bill the student. In such cases, the student will be required to make arrangements with the Business Office to pay the balance.
Academic Eligibility for Federal Title IV (Federal Student Aid) Programs
Satisfactory Academic Progress:
Students need to remain in good standing, meet certain academic requirements and maintain satisfactory academic progress to continue to be eligible to receive Federal Title IV funds (federal financial aid).
Another federal regulation which affects eligibility for Federal Title IV (federal financial aid) is called the 150% rule. This means that a student has 150% of the time allotted to complete their degree or program. For example, a student pursuing a 4-year degree, must complete that degree in 6 years or they will lose all financial aid eligibility.
Other SVC Financial Aid Information
Stacey Hills, Chair, Associate Professor, The McCormick Division of Business