Financial Aid Recipients
If any amount of tuition is paid with funds from a Title IV Program and the student withdraws during the established refund period, the Title IV program funds will be adjusted and any unearned aid will be returned in the following order: Loans: Federal Unsubsidized, Federal Subsidized and Federal Plus. Grants: Federal Pell Grant, Federal Supplemental Educational Opportunity Grant and Other Title IV programs. Under federal law, DMACC must return the funds as soon as possible, but no later than 45 days after DMACC determines the student’s withdrawal date.
A student’s financial aid is based on the number of classes the student is enrolled in and the number of days the student is enrolled in classes. When a student initiates a withdrawal from one or more classes, the amount of financial aid the student is eligible to receive is affected. The Return of Title IV funds to the federal government is based on a calculation that determines how much aid the student is eligible to receive and how much the student is no longer eligible for, because he/ she is no longer enrolled in school. This calculation is applicable until the student has completed more than 60 percent of the semester. Once the student has completed more than 60 percent of the semester, all financial aid is considered earned.
For example:
If a student completed 10 percent of the semester, the student will have earned 10 percent of the financial assistance awarded for the semester. Any aid above and beyond the 10 percent is considered unearned and must be returned to the federal government.
Who Is Responsible for Returning the Unearned Funds?
As prescribed by federal law, DMACC is required to return the lesser of:
- The unearned amount of the financial aid; or
- An amount equal to the student’s total institutional charges for the semester, multiplied by the percentage of unearned aid.
As prescribed by federal law, the amount the student must return is:
- The unearned amount of Title IV assistance minus any funds DMACC returned. If the student is required to repay unearned loan funds, these funds will be repaid in accordance with the terms of the promissory note. That is, through scheduled payments to the holder of the loan over a period of time.
If the student is required to repay unearned Pell and/or SEOG Grant funds, the law provides that the student is only required to return grant funds if the final grant overpayment amount exceeds 50 percent of the total grant assistance the student received for the payment period.
Any unearned grant money must be repaid by either making arrangements with DMACC or with the U.S. Department of Education.
Example:
Bill Dollar is a returning student from Des Moines who was disappointed to have to withdraw from DMACC during the semester, particularly since he is doing very well in the 12 credit hours he is taking. Bill has to withdraw for personal reasons.
Bill was awarded the following financial aid, which was credited to his student account:
| Federal Direct Student Loan | $1,733 |
| Federal Pell Grant | 998 |
| Federal SEOG | + 250 |
| Total Financial Aid Awarded | $2,981 |
Bill completed only 11 days of classes or 10 percent of the semester. Bill’s tuition and fee charges for the full semester are $1,284.
To determine how much money must be returned by DMACC and Bill, the financial aid staff must first determine how much financial aid Bill did not earn. Since Bill only attended 10 percent of the semester, he only earned 10 percent of his financial aid. Therefore, the unearned percent of his financial aid is 90 percent.
| Total Financial Aid Awarded | $2,981 |
| Multiply Percent of Unearned Aid | x .90 |
| Amount of Unearned Aid | $2,682.90 |
Per federal requirements, DMACC and Bill must repay a total of $2,682.90.
Per federal requirements, DMACC and Bill must repay a total of $2,682.90.
| Total Institutional Charges | $1,284.00 |
| Multiply Percent of Unearned Aid | x .90 |
| Amount to be Repaid | $1,155.60 |
Bill is required to return the remaining unearned amount.
| Total Unearned Aid | $2,682.90 |
| Subtract Percent of Unearned Aid | -$1,155.60 |
| Amount Bill Must Repay | $1,527.30 |
Amount and Order of Repayment
In the example, both DMACC and Bill must return loan funds. After completing the calculations and following the repayment guidelines, it was determined that DMACC should repay $1,155.60 to Bill’s loan. Bill will be required to repay $577.40 to the Federal Direct Student Loan Program, through a repayment plan in accordance with the terms of his promissory note. In addition, based on the calculations, $949.90 of Bill’s Pell Grant was unearned. As DMACC has already paid the total amount it owes to the loan program, Bill is responsible for paying back 50% of the Pell Grant.
| Unearned Pell Grant | $949.90 |
| x .50 |
| Amount Bill Must Repay | $474.95 |
Title IV Grant Overpayment
If a student is required to repay an unearned grant (overpayment), the student will remain eligible for Title IV aid up to 45 days after the student has been notified of the overpayment. The student may resolve the overpayment by repaying the overpayment in full to DMACC, by making satisfactory repayment arrangements with DMACC, or by making satisfactory repayment arrangements with the U.S. Department of Education.
Outstanding Balance on DMACC Account
If a student withdraws from DMACC prior to completing 60 percent of the semester, the student is responsible for paying any outstanding tuition and fee charges that remain after DMACC has repaid any unearned financial aid to the federal government.
Post-Withdrawal Disbursement
Post-Withdrawal Disbursement
Questions Concerning Return of Financial Aid Title IV Funds
Contact the DMACC Financial Aid Office by calling 1-800-362-2127, ext. 6282, for additional information concerning the Return of Title IV Aid or at www.DMACC.edu/fin_aid.
As the regulations governing Return of Title IV Aid are subject to change, refer to DMACC’s financial aid website www.DMACC.edu/fin_aid for up-to-date information.
